TOKYO: Toyota Motor Corp posted a 98% plunge in its first-quarter operating profit today as the coronavirus pandemic halved it global sales.
Japan’s top automaker reported a profit of 13.9 billion yen (RM548mil) for the three months ended June, its worst since the June 2011 quarter. Still, it was better than an average estimate for a loss of 179 billion yen (RM7.1bil) based on a Refinitiv poll of seven analysts.
The bleak results underline the challenges being faced by the global auto industry due to the health crisis that has shuttered factories this year and kept customers out of dealerships, hitting production and sales.
Toyota reiterated its forecast for an annual operating profit of 500 billion yen (RM19.8bil), which would be its weakest in nine years, while raising its vehicle sales forecast.
Toyota, which like its rivals saw sales and production crash over March-May, expects its global sales to fall 13% in the year ending March 2021, versus its prior outlook for a 15% drop.
The maker of the RAV4 SUV crossover and the Prius gasoline hybrid expects to sell 9.1 million cars this fiscal year to March, down from 10.46 million last year, but better than a previous forecast for 8.9 million units.
That would still mark its lowest sales in nine years, hit by a 14% drop in sales in North America – Toyota’s biggest market that accounts for about a quarter of its global sales.
In the first quarter, global sales fell 50% to 1.16 million units, led by a 62% tumble in North America.Toyota expects production to largely return to normal levels this month.
Over at Honda, the situation isn’t much better, with a forecasted 68% decrease in annual operating profit to a 10-year low with global demand for cars expected to slide because of the pandemic.
Japan’s No. 3 automaker expects profit to sink to 200 billion yen (RM7.9bil) in the year to end-March 2021, its weakest since the 2010/11 year and undershooting analyst estimates.
Honda is bracing for a 6% decrease in annual vehicle sales after a 40% plunge in the June quarter, which resulted in a 113.7 billion yen operating loss.
Global automakers are taking a big hit from the coronavirus outbreak, which shuttered vehicle factories this year and has kept customers out of car dealerships.
The maker of the CR-V SUV crossover and the Fit compact hatchback expects to sell 4.5 million vehicles this year, versus 4.79 million last year. It predicts a 16% sales slide in North America, a key market where the United States is struggling to control a surge in virus infections.
“If the current situation continues as is, we think the situation will not get worse (than we saw earlier this year), but it will take time for demand to recover to pre-pandemic levels,” Executive Vice President Seiji Kuraishi told a livestreamed briefing.
Despite weaker sales in North America, Honda expects annual sales in Asia to increase 8%.
China, one of Honda’s biggest markets, has become a rare bright spot for many global automakers, as demand in the world’s biggest car market has been recovering faster than in other countries.
Honda sank into the red for the second straight quarter and posted its worst operating loss since the March 2009 quarter.
Despite its dire outlook, Honda is weathering the coronavirus pandemic better than rivals Nissan Motor Co, Mitsubishi Motor Corp and Mazda Motor Corp, which last week forecast record operating losses for the year.
Keyword: Toyota and Honda brace for more pain