Toyota warns of 64% drop in profit
TOKYO: Toyota Motor Corp yesterday warned of a 64% drop in full-year net profit and reported a slump in quarterly earnings, as the coronavirus pandemic shreds the global auto market.
Japan’s top carmaker, which had previously declined to give a bottomline forecast because of ongoing uncertainty, now projects net profit at 730 billion yen ($6.9 billion) for the fiscal year to March, down from 2.07 trillion yen the previous year.
Its forecast of annual operating profit remained unchanged at 500 billion yen, down nearly 80% from the previous year.
“The impact of Covid-19 is wideranging, significant and serious, and it is expected that weakness will continue for the time being,” Toyota said in a statement.
The warning came as Toyota reported a 74.3% plunge in net profit for the three months to June, with quarterly revenue down more than 40%.
By region, operating profit in Japan dropped more than 80% in April-June, while it logged losses in North America and Europe.
Carmakers around the world have been battered by the pandemic, with many relying on government help, as it slams the global economy into reverse and forces people to stay at home.
“It was a tough quarter for all Japanese automakers. Toyota was no exception,” said Satoru Takada, auto analyst at TIW, a Tokyo-based research and consulting firm.
“Production is recovering from the pandemic impact, after hitting rock bottom in April and May, but sales are expected to remain stagnant for now,” he told AFP ahead of the results.
General Motors Co fell into the red in the second quarter with a $758 million loss, reversing a quarterly net profit a year ago.
Toyota’s smaller domestic rival Nissan Motor Co warned of a massive $6.4 billion net loss for the current fiscal year, while Honda Motor Co reported a net loss for the quarter and forecast a much-reduced fullyear profit.
Toyota said the pandemic and the response to the virus had “adversely affected” the firm “in a number of ways”.
It cited falling demand, as well as the temporary suspension of production at plants in Japan and overseas and hits to Toyota dealers, distributors, and third-party suppliers.
“The duration of the global spread of Covid-19 and the resulting future effects are uncertain,” the company warned, adding it was “difficult to predict” the final impact of the virus on its business.
Toyota suffered a 31.8% fall in global vehicle sales in the same period but signs of a recovery in sales have emerged in some markets such as China.
It upgraded global sales target to 9.1 million units for the fiscal year from its earlier estimate of 8.9 million units.