Japanese auto maker Toyota Motor Corp managed to pull out a very small quarterly profit which as the lowest for it in nine years as the company struggled to cope up with the hit to the global economy due to the novel coronavirus pandemic and demand for vehicles as the sale of the company halved and almost wiped out its bottom line.
However with analyst expecting the company to report a loss of the most recently completed quarter investor confidence propped up the shares of the company in Japan by 2.3 per cent. Investors were also encouraged by comment from a spokesperson of Japan’s top automaker of he confidence of the company in making a faster than expected recovery in sale in some of the international markets that it operates in.
In the three months ended June, the operating profit of Toyota dropped by 98 per cent to touch 13.9 billion yen ($131.73 million) which as better then was the analysts were expecting – that of a loss of 179 billion yen, according to Refinitiv.
The challenges posed to the global auto industry by the pandemic, which has forced closure of factories and dissuaded consumers away from dealerships was underlined in the significantly lowered earnings of Toyota.
While reiterating its previously forecast annual operating profit of 500 billion yen, a low for nine years, Toyota tried to comfort investors and the market by saying that it expects decline in sale of its vehicles to be lower than is being expected by the market.
“The pace of recovery in a number of regions has been faster than we had initially forecast,” Toyota spokesman Ryo Saki said at a briefing on Thursday. “But the virus situation continues to place many uncertainties on the business outlook … and we see a possibility that our forecast could change.”
For the financial year ending March 2021, Toyota expects a 13 per cent drop in its global sales which was a slower rate of decline compared to its previous forecast of a 15 per cent slide in sales globally.
But achieving even that number would mean its worst performance in sale in nine years.
The compared to an annual sale of 10.46 million vehicles last year, Toyota expects its 2020-21 annual sales to be around 9.1 million cars, said the maker of the RAV4 SUV crossover and the Prius gasoline hybrid cars. The company expects a 14 per cent drop in sale in its North American business – the largest market for the company accounting for about one fourth of its total sales globally.
Previously the company had forecast sales of 8.9 million units.
During the first quarter of Toyota, the company reported a 50 per cent drop in its consolidated global sales to 1.16 million units. North America saw a drop of 62 per cent in same for the company in the quarter. The Japanese firm expects normalization of sale by in January-March quarter of 2021 and expects growth in sales in that period to be 5 per cent year on year.
(Adapted from News18.com)