Toyota Motor Corp. on Tuesday forecast a sharp drop in sales and operating profit over the coming year as the car giant suffers from the "wide-ranging, significant and serious" fallout from the coronavirus pandemic that has shredded the global auto market.
Japan's largest automaker by volume said its operating profit for the year ending in March 2021 was expected to dive 79.5 percent to ¥500 billion ($4.65 billion). The carmaker withheld its net profit forecast for the current business year, citing uncertainties about the global market outlook.
Toyota, which saw work at factories in China, the United States, Japan and Europe temporarily suspended from earlier this year due to the pandemic, expects sales to fall 19.8 percent to ¥24 trillion in the current year after seeing sales decrease for the first time in three years in the just-ended business year.
Chief Financial Officer Kenta Kon told a news conference Toyota made the latest projections on the premise that it expects sales to bottom out in April and gradually recover to levels seen a year earlier toward the end of 2020.
"We still cannot determine the timing of a recovery with any degree of certainty," Kon said.
After being suspended for over a month, Toyota's factories in the United States and Europe have gradually resumed production, while sales in China have also picked up at a faster-than-expected pace in March and April, he said.
The sales figures include vehicles sold by its subsidiaries, small-car manufacturer Daihatsu Motor Co. and truck-maker Hino Motors Ltd.
For the year ended this March, Toyota posted a 10.3 percent rise in its consolidated net profit to ¥2.08 trillion from the previous year, the first increase in two years, on sales of ¥29.93 trillion, down 1 percent. Operating profit declined 1 percent to ¥2.44 trillion.
In the January-March quarter, net profit plunged to ¥63.1 billion from ¥459.5 billion from a year earlier.
The car giant said the spread of the disease had affected it in a number of ways: it has had to mothball several plants around the world, parts supply chains are crippled and dealerships are either closed or facing sales slumps.
With different countries tackling different stages of the virus, it is "extremely difficult to foresee the outlook" for Toyota's business, Kon said.
Carmakers around the world have suffered as the pandemic slams the global economy into reverse.
Auto production in Brazil, for example, fell a catastrophic 99 percent in April, according to the carmakers' association.
Profits at Toyota's global competitors have seen similar falls, with General Motors reporting an 86 percent slump in first-quarter earnings last week.
Satoru Takada, auto analyst at TIW, a Tokyo-based research and consulting firm, said that Toyota had been putting in a "steady" performance but was powerless in the face of the pandemic.
"The auto industry's business environment has totally changed," he said, with the virus slamming both supply and demand.
"No one can predict when the impact will ease and what the business environment is going to be like after the storm of the outbreak," the analyst said.
"The end of the tunnel has yet to be in sight."
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