Japanese automaker Toyota is expecting its full-year operating profit to decline by 80% to its lowest in 9 years as a result of the COVID-19 pandemic. Toyota is also expecting its sales to remain weak for the rest of this year, with global sales anticipated to drop by more than 1.5 million units compared to last year.
According to Reuters, Toyota has forecast an operating profit of 500 billion yen for the year through March 2021, down from the 2.44 trillion yen it achieved in the year just ended. Toyota president Akio Toyoda said:
“The coronavirus has dealt us a bigger shock than the 2008 global financial crisis. We anticipate a big drop in sales volumes, but despite that we are expecting to remain in the black.”
Toyota is forecasting global sales to be at around 8.9 million vehicles this year, a significant drop from the 10.46 million units it sold last year. According to the company, sales are not expected to recover to 2019 levels until next year.
As a result of weak consumer demand, the automaker is also cutting productions. In Japan, vehicle production will be reduced by 122,000 units in June, with production being halted at all of its 15 plants for four days next month.
Despite the profit slump and a sharp cut to margins, Toyota said it would pour more than one trillion yen each into capital expenditure and R&D investment, keeping spending largely unchanged from last year. This was because Toyota says it does not want to stop investing in the future.