Toyota doubles full-year forecasts as sales recover
07 November, 2020
Toyota on Friday almost doubled its full-year forecasts, saying sales and production were recovering quickly from the coronavirus pandemic, which has shredded the global auto market this year.
Japan's top car maker now projects net profit of just one 1.42 trillion yen for the fiscal year to March 2021, up from a youthful estimate of 730 billion yen.
It said full-year sales are actually expected to hit 26 trillion yen, against a previous estimate of 24 trillion yen.
Results for the first half appeared sluggish weighed against the prior year, with net profit down 45.3 percent at 629.4 billion yen.
However the signs of recovery were clear in the second quarter, with bottom-line profit at 470.5 billion yen against 158.8 billion yen in the last quarter, when the pandemic was hitting hard.
Carmakers all over the world have already been battered by the coronavirus crisis, with many counting on government help, as it slammed the global economy into reverse and forced persons to stay in the home.
But Toyota last week reported both global production and sales hit record highs for September, marking the first gains in nine months.
"I think we were able to recover (in the next quarter)," chief operating officer Kenta Kon told reporters, saying "sales outlets and suppliers made efforts to deliver as much vehicles as possible".
He said the firm also benefited from a "foundation of measures" set up since the 2008 financial meltdown.
"The impact of the pandemic has yet to be fully erased, but Toyota swiftly recovered in the July-September period," said Satoru Takada, auto analyst at TIW, a Tokyo-based research and consulting firm.
"While we can not be too optimistic, both sales and production remain on course to recovery," Takada told AFP ahead of the results.
"Given the extreme business environment, Toyota is outperforming its domestic rivals," he added.
On Thursday, U.S. giant General Motors reported a 72 percent upsurge in third-quarter profit since it cited strong recoveries in america and China.
German auto maker Volkswagen also said the other day it booked net profit of $3.2 billion in the three months to September, weighed against a loss of 1.5 billion euros in the preceding 90 days.
Toyota's smaller domestic rival Nissan is scheduled to announce its first-half earnings in a few days, three months after warning of an enormous $6.4 billion net loss for the current fiscal year.
Honda is to announce its interim results later in the day.
Japan's auto industry is closely watching the fate of the U.S. presidential election, which might create a poor impact, including on forex rates, Takada added.
The impact of a return to lockdowns in Europe and tightened restrictions elsewhere as coronavirus infections surge remains to be observed.
"Going back half of the entire year, we are carefully monitoring the pandemic situation including lockdown," Kon said. "We can not fully predict what's ahead for the full year. You want to carefully monitor the coronavirus situation."
Toyota shares rose more than one percent on the Tokyo Stock Exchange following the results were released.
"The marketplace is reacting positively to Toyota's results," said Toshikazu Horiuchi, an agent at IwaiCosmo Securities. "But a strong yen remains a significant concern for Toyota and other auto makers, which includes limited buying sentiment today."
Toyota set a forex rate at 106 yen per dollar for the fiscal year, compared with 103.45 yen in Asian afternoon trade.
A solid yen often clouds the outlook for Japanese exporters since it reduces their profits if they are repatriated.
Source: japantoday.com
TAG(s):