Japan’s auto giant has been preparing for a major crisis for years. This pays off in the corona pandemic: Toyota is making a profit despite the crisis.
Japan’s largest automaker Toyota still made a profit last quarter despite the global corona crisis. Although sales dropped 40 percent to 4.6 trillion yen ($43.5 euros), Toyota was still able to generate an operating profit of 13.9 billion yen ($132 million). This corresponds to two percent of the profit in the same quarter last year. Net profit, however, fell by 74 percent to 158.8 billion yen ($1.5 billion).
Toyota is also proving its exceptional position in the corona pandemic: The profit of the largest Japanese car manufacturer was almost completely erased in the past second quarter.
In contrast to almost all of the competition – from the German car makers Volkswagen, Daimler and BMW to mass manufacturers such as Fiat Chrysler, Renault / Nissan or General Motors – Toyota stayed in the black. The operating profit collapsed to the worst in nearly a decade. Nevertheless, analysts were impressed: “I wouldn’t have believed anyone but Tesla to do that,” said Frank Schwope from NordLB. “I am amazed.” The Korean car maker Hyundai however, it was also in the black.
Toyota’s sales halved to 1.16 million vehicles between April and June. In North America, Toyota’s largest market, it even fell 62 percent. The group seems to have the worst behind it. Production is expected to return largely to normal levels in August. “The pace of recovery in a number of regions has been faster than we originally forecast,” said a spokesman. However, there is still a lot of uncertainty about the further course of the pandemic, he said. That could also have an effect on the forecast.
Sales forecast upgraded for Q1 2020
The group now expects a sales decline of 13 percent to 9.1 million cars for the fiscal year ending March 2021. Previously, the board had forecast a significantly larger decline of 15 percent to 8.9 million vehicles. For the first quarter of 2021 Toyota expects increasing sales figures. At the same time, the management reiterated the forecast of an operating profit of 500 billion yen for the fiscal year.
The pandemic will accelerate the trend towards mergers and acquisitions in the industry, analyst Schwope believes. Here Toyota is already well ahead with its holdings in Subaru, Suzuki and Mazda. Together, the four Japanese car companies had sales of more than 16 million vehicles in 2019. The Japanese automotive industry seems to be preparing for the upheavals in the automotive world, which will accelerate in the next few years due to the pandemic, said Schwope.
