TOKYO (Kyodo) -- Toyota Motor Corp. said Wednesday its net profit for the six months to September dropped 26.4 percent from a year earlier to 1.91 trillion yen ($12 billion), impacted by a quality scandal and weaker sales in China.

Operating profit for the first half of fiscal 2024 decreased 3.7 percent to 2.46 trillion yen on sales of 23.28 trillion yen, up 5.9 percent, the Japanese automaker said.

The automaker, still reeling from the recent quality scandal in which it admitted to not fully following government standards in vehicle tests, also downgraded its production outlook for the Toyota and Lexus brands for the fiscal year to 9.7 million vehicles from 10 million.

The scandal led to a production halt for some popular models such as the Yaris Cross sport utility vehicle, idling some of its production lines in Japan and eroding earnings at the world's biggest automaker group.

In overseas markets, Toyota continued to struggle in China where consumers are increasingly snapping up more affordable electric vehicles from local brands rather than those offered by Japanese automakers.

The Toyota group globally sold 5.37 million vehicles during tsix-month period, down 4.0 percent, as it saw a 12.4 percent slide in Japan and a 13.7 percent drop in China.

The lower net profit was also attributable to valuation losses on foreign-currency-denominated assets, as the yen was generally stronger at the time of reevaluation compared with a year earlier. The factor pushed down net profit by 227 billion yen, Toyota said.

"The recent quality issue has opened our eyes to many things we previously overlooked," Chief Financial Officer Yoichi Miyazaki said at a press conference. "We will ramp up investment and improve our work environment."

Miyazaki said the company now plans to invest 830 billion yen annually in improving the welfare of its employees, as well as those working at its suppliers and dealerships, and accelerating the development of new technologies, upgraded from the 750 billion yen it set aside previously.

Toyota maintained its earnings forecast for the year ending March next year.

It projects net profit to fall 27.8 percent from the previous year to 3.57 trillion yen while estimating sales to grow 2.0 percent to 46 trillion yen.

The automaker forecast the U.S. dollar and euro to trade at 147 yen and 161 yen for the current business year, respectively, revised from its earlier projections of 145 yen and 160 yen.

Its group-wide sales for the business year, including those for Hino Motors Ltd. and Daihatsu Motor Co., are now forecast at 10.85 million units, down 100,000 from its earlier projection.