Toyota Warns of 64% Drop in Full-Year Net Profit Due to Pandemic
People aren't buying new cars. Hell, people aren't driving.
Toyota has warned of a 64-percent drop in full-year net profit and reported a slump in quarterly earnings, as the coronavirus pandemic shreds the global auto market.
Japan's top carmaker, which had previously declined to give a bottom-line forecast because of ongoing uncertainty, now projects net profit at 730 billion yen ($6.9 billion) for the fiscal year to March, down from 2.07 trillion yen the previous year.
Its forecast of annual operating profit remained unchanged at 500 billion yen, down nearly 80 percent from the previous year.
"The impact of COVID-19 is wide-ranging, significant, and serious, and it is expected that weakness will continue for the time being," Toyota said in a statement.
Toyota issued the latest warning as it reported a 74.3 percent plunge in net profit for the three months to June, with quarterly revenue down more than 40 percent.
Carmakers around the world have been battered, with many relying on government help, as the pandemic slams the global economy into reverse and forces people to stay at home.
General Motors fell into the red in the second quarter with a $758 million loss, reversing a quarterly net profit a year ago.
Toyota's smaller domestic rival Nissan warned of a massive $6.4 billion net loss for the current fiscal year, while Honda reported a net loss for the quarter and forecast a much-reduced full-year profit.
Toyota said the pandemic and the response to the virus had "adversely affected" the firm "in a number of ways."
It cited falling demand, as well as the temporary suspension of production at plants in Japan and overseas and hits to Toyota dealers, distributors, and third-party suppliers.
"The duration of the global spread of COVID-19 and the resulting future effects are uncertain," the firm warned, adding it was "difficult to predict" the final impact of the virus on its business.