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By Naomi Tajitsu
TOKYO (Reuters) – Toyota Motor Corp made its smallest quarterly profit in nine years, as the coronavirus pandemic halved its car sales and nearly erased its results.
However, shares of Japan’s largest automaker rose 2.3% in a smaller and broader market, and analysts expected losses, while comments from a corporate spokesperson on a faster-than-expected sales recovery also provided support.
Toyota’s operating profit plummeted 98% to 13.9 billion yen ($131.73 million) for the 3 months ended in June, which a consensus estimate of a loss of 179 billion yen from a Seven-Analyst Refinitiv survey.
The decline in profits highlights the demanding situations facing the automotive industry as a result of the pandemic that closed the factories and prevented consumers from going to dealerships.
But Toyota is more resistant to the virus epidemic than many of its rivals. Most of the world’s automakers fell to red numbers in the last quarter, and many of them, Ford Motor Co, Nissan Motor Co and Mitsubishi Motors Corp., are preparing for year-round operational losses.
Toyota reiterated its annual forecast of operating profits of 500 billion yen, the weakest in nine years, arguing that coronavirus could further damage its sales prospects.
“Recovery speed in several regions has been faster than we expected,” said a Toyota spokesman.
“But the viral continues to position many uncertainties about the customersArray business.. and we see an option that our forecasts will change.”
(For interactive charts on Toyota vehicles and earnings, click https://fingfx.thomsonreuters.com/gfx/editorcharts/xegpbaeezvq/index.html)
VIEW SALES OVER 9 YEARS
The manufacturer of the SUV rav4 crossover and the Prius gasoline hybrid expects global retail sales of 9.1 million cars this year, its lowest level in years.
This would mark a minimum of 13% from 10.46 million last year, this is an improvement over the past prospect of a minimum of 15%.
Toyota expects to suffer the most serious blow in North America, its largest market, which accounts for about a quarter of its global sales, and where it sees its sales drop by 14% consistent with the year.
A 62% drop in the region in the first quarter led to a 50% drop in consolidated sales to 1.16 million units.
But while sales have fallen in the top regions, China has been positive for Toyota. Demand in the world’s largest automotive market has recovered faster than elsewhere, with the state largely controlled by rolling back the pandemic and reopening its economy.
Toyota’s Lexus luxury logo has been a major beneficiary of the return of demand, boosting sales from January to July to 7% during the year thanks to the country’s online block marketing campaigns. Toyota expects global sales to improve gradually through December, go back to general in January-March 2021 and expand by 5% during the year.
Starting in April, Toyota initiated the foreign monetary information criteria to calculate its consolidated monetary results.
(Report through Naomi Tajitsu; edited through Himani Sarkar and Gerry Doyle)