Toyota expects profit to fall 80 per cent on coronavirus hit
Japanese carmaker Toyota today said it expects profit to fall 80 per cent to its lowest level in nine years after the impact of coronavirus on its sales.
Toyota said it expects to take a massive 1.5 trillion yen (£11bn) hit from a collapse in global sales, but it still expects to scrape an operating profit of 500bn yen in the year to March.
“The coronavirus has dealt us a bigger shock than the 2008 global financial crisis,” Toyota president Akio Toyoda said at a livestreamed media briefing.
“We anticipate a big drop in sales volumes, but despite that we are expecting to remain in the black. We hope to become a leader of the country’s economic recovery.”
Toyota forecast a drop in operating profit from 2.44 trillion yen last year to its weakest profit since 2010-11.
Toyota predicted global sales of 8.9m vehicles – the lowest for nine years – versus 10.46m in the year just ended. It said it expects sales to recover to 2019 levels next year.
Rival carmakers including General Motors and Honda have not issued forecasts because of uncertainty caused by the coronavirus pandemic.
Honda today posted its weakest annual profit in four years following a 28 per cent drop in vehicles sales in the final quarter which drove it to an operating loss of 5.2bn yen for the quarter, its first quarterly loss since March 2016.
Toyota expects sales to remain weak through December, before returning to 2019 levels sometime next year.
In the year ended March, Toyota said it took a 160bn yen profit hit from the virus due to a cut in annual sales of 127,000 vehicles from a record high of 10.6m last year.
Despite the profit slump and a sharp cut to margins, Toyota said it would pour more than one trillion yen each into capital expenditure and R&D investment, keeping spending largely unchanged from last year.
“We cannot stop investing in the future,” operating officer Koji Kobayashi told reporters.