Toyota has issued forecasts that show the Japanese auto-giant expects its net profit in 2020 to drop by more than 64%.
The auto manufacturer had previously refused to issue a forecast for its bottom line, but now says that it expects net profit to drop to 730 billion Yen ($6.9 billion) for the fiscal year ending in March, down from 2.07 trillion Yen ($19.6 billion).
Quarterly results were down more than 40%, with Toyota reporting a staggering 74.3% drop in net profit for the three-month period leading into June, 2020.
“Production is recovering from the pandemic impact after hitting rock bottom in April and May, but sales are expected to remain stagnant for now.” Satoru Takada
Toyota is yet to revise its annual operating profit – standing at 500 billion Yen ($4.7 billion), which is a dramatic decrease of 80% over 2019 figures.
Toyota said that “the duration of the global spread of COVID-19 and the resulting future effects are uncertain,” concluding that it was becoming “difficult to predict” the company’s financial future.
In spite of the drop in earnings, Toyota revised earlier production numbers for the year up from 8.9 million units to 9.1 million.
Satoru Takada, automotive analyst with TIW in Tokyo told the AFP that “it was a tough quarter for all Japanese automakers. Toyota was no exception.”
“Production is recovering from the pandemic impact after hitting rock bottom in April and May, but sales are expected to remain stagnant for now,” he said, adding that “the impact of COVID 19 is wide-ranging, significant, and serious, and it is expected that weakness will continue for the time being.”
“Negative factors have outweighed the positive ones, but Toyota is still less affected than its rivals,” Takada said.
Competitor manufacturer Nissan has previously said it expects losses of $6.4 billion for the fiscal year, with Honda reporting a significantly reduced annual profit after reporting a loss for the quarter.