Toyota Motor Corp said it expects its profit to decline by 80 per cent to its lowest in figure in nine years, as Japan’s biggest carmaker comes to terms with the impact of the coronavirus, which has severely dented global demand for vehicles.
The company forecasts global sales of 8.9 million vehicles, a nine-year low, compared to 10.46 million last year.
One of the world’s most profitable carmakers, Toyota predicts a 1.5tr yen ($13.95bn) hit from a fall in global vehicle sales this year, largely because of the novel coronavirus. It still expects to eke out an operating profit of 500bn yen in the year to March – its weakest since the 2011/12 financial year and huge drop from the 2.44tr yen in the year just ended.
Along with limited output due to fractured supply chains and social distancing measures at plants, the industry expects weak demand, as unemployment and concern about the economic fallout weigh heavily on consumer spending – especially on big-ticket purchases like cars.
Toyota’s outlook came as rivals, including Honda Motor Co Ltd and General Motors, have withheld from issuing forecasts, citing uncertainty about the coronavirus.
Honda recently posted its weakest annual profit in four years, after a 28 per cent drop in fourth-quarter vehicle sales plunged the automaker into an operating loss of 5.2bn yen, its first quarterly loss since the March 2016 quarter.
Toyota expects sales to remain weak through December, before returning to 2019 levels sometime next year.