Business / Corporate

Toyota's global output plunged record 54.4% in May amid pandemic

KYODO, BLOOMBERG

Toyota Motor Corp. said Monday the novel coronavirus pandemic caused its global output in May to plunge 54.4 percent from a year earlier to 365,909 vehicles, the sharpest fall since comparable data became available in 2004.

Japan’s biggest automaker also said its global sales fell 31.8 percent to 576,508 vehicles in the reporting month, though that was an improvement from a 46.3 percent drop in April.

Toyota’s global production declined for the fifth consecutive month, as domestic output dived 57.0 percent to 122,744 vehicles and overseas production tumbled 53.0 percent to 243,165 units due to stay-at-home requests and falling demand around the world.

Output fell 78.5 percent in North America and 58.9 percent in Europe due largely to weak demand amid the COVID-19 pandemic.

Meanwhile, production in China rose 13.5 percent to 137,071 vehicles, as demand including for new models of the RAV4 sport utility vehicle and Corolla sedan grew, while coronavirus infections in the country have declined, the company said.

Despite the global output plunge in May, the company said last week that its domestic production volume in July is expected to recover to about a 10 percent drop against an initial plan in reflection of the resumption of economic activities in Japan.

The rate compares with an estimated 40 percent decrease in June, according to the automaker.

Toyota’s domestic production plans are influenced by global demand, as it exported around 60 percent of some 3.41 million vehicles made in Japan last year.

The carmaker has said it expects the sales drop due to the coronavirus to have bottomed out in April and that sales will gradually recover to levels seen a year earlier toward the end of this year.

During its annual shareholders meeting held earlier this month, Chief Executive Officer Akio Toyoda said the company will remain profitable during the coronavirus pandemic, using lessons it learned during the global financial crisis more than a decade ago.

As part of efforts to assist cash-strapped customers, Toyota is relaxing auto-loan payment deadlines and offering used rental cars instead of new ones.

“If we don’t win, we wouldn’t be able to support this industry and country,” Toyoda said at the meeting. “We are different today from what we were during the financial crisis.”

Japan’s biggest automaker won’t change its plan to produce 3 million cars annually in the country, according to Mitsuru Kawai, Toyota’s chief human resources officer. The company has halted some domestic factories from April through June.

Toyota has warned profit will tumble 80 percent to a nine-year low and targeted operating profit of ¥500 billion for the year through March. The target is not a plan, but rather a minimum standard that it’ll have to meet, said Toyoda.

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