TOKYO (Reuters) – Subaru Corp said Tuesday that its annual operating profit will fall to a low of nine years, as it expects sales to have an effect in the United States, its largest market where the number of coronavirus infections continues to increase.
Japan’s seventh-largest car manufacturer through sales expects its annual operating profit to fall by 62% to 80 billion yen ($754.3 million), its lowest level since 2011/12 and weaker than analyst estimates compiled through Refinitiv.
It recorded an operational loss of 15.7 billion yen in the quarter from April to June, its largest quarterly operating loss in nearly 11 years due to a halving of global vehicle sales.
Global automakers are affected by the coronavirus outbreak, which closed vehicle factories in the previous year and prevented car dealership consumers from falling, leading to a decline in production and sales.
By March, the manufacturer of indoor game application crossovers and Forester plans to have 900,000 cars, 13% less than last year and a minimum of seven years.
In the United States, which accounts for two-thirds of sales, it expects to sell between 590,000 and 600,000 vehicles, a 15% relief during the year.
Lower sales will hurt annual profits, however, Subaru’s lead executive, Tomomi Nakamura, said the company would remain in the dark as major loans enjoyed through higher-income consumers of the brand would help the financial pressures of automakers.
“We don’t expect a U.S. blockade nationwide and we’re seeing a slow but stable demand recovery,” he said in a briefing, adding that he hoped profitability would return to profitability this quarter.
While Subaru is preparing for a drop in annual profits, it is more resistant to the coronavirus epidemic than rivals such as Nissan Motor Co Ltd, Mitsubishi Motor Corp and Mazda Motor Corp, which last week predicted record operating losses for the year.
($1 – 106,0900 yen)
Reporting through Naomi Tajitsu; Editing through Christopher Cushing and Gerry Doyle
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