Massive Anticipated Corona Hit Aside, Toyota's Sitting Pretty
Toyota, the automaker that regularly jousts with Volkswagen for the title of World’s Largest Automaker, expects its finances to take a major hit this year. A solid blow, but not a knockdown punch.
With sales down severely and production depressed across the globe, Toyota envisions an 80-percent profit drop for the current fiscal year.
After posting a profit of $22.3 billion for the fiscal year ending in March, the automaker said it expects the coronavirus pandemic to take a $14 billion bite out of its balance sheet. Operating profit for fiscal year 2020 is pegged at $4.7 billion.
Toyota’s car volume for the current year is expected to come in around 8.9 million vehicles, down from roughly 10.6 million last year. That’s a 9-year low for the automaker.
While the company expects return to healthy, 2019-like levels in 2021, this year will be a bitch of a thing, Toyota warned. You can’t fault the company for shying away from issuing less-than-rosy forecasts — something that can’t be said of many of its peers.
“The coronavirus has dealt us a bigger shock than the 2008 global financial crisis,” Toyota President Akio Toyoda said in an online media briefing, per Reuters.
“We anticipate a big drop in sales volumes, but despite that we are expecting to remain in the black. We hope to become a leader of the country’s economic recovery.”
While the reopening of America is well underway, with auto sales rising week over week, the fiscal damage of the extended lockdown is already severe, and it’s compounded by deprsssed sales overseas. Toyota reported a 54-percent U.S. sales drop in April. North American production got underway on Monday, but it won’t be business as usual for some time, what with new health protocol to adapt to and lingering supply chain issues.
Helping Toyota shrug off the damage is a massively loyal customer base and an array of products that top their respective segments in terms of sales.
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- Del My father bought GM cars in the 60's, but in 1971 he gave me a used Datsun (as they were called back then), and I'm now in my 70's and am happy to say that GM has been absent from my entire adult life. This article makes me gladder than ever.
- TheEndlessEnigma That's right GM, just keep adding to that list of reasons why I will never buy your products. This, I think, becomes reason number 69, right after OnStar-Cannot-Be-Disabled-And-It-Comes-Standard-Whether-Or-Not-You-Want-It and Screw-You-American-Car-Buyer-We-Only-Make-Trucks-And-SUVs.
- 3SpeedAutomatic Does this not sound and feel like the dawn of ICE automobiles in the early 20th century, but at double or triple speed speed!!There were a bunch of independent car markers by the late 1910’s. By the mid 20’s, we were dropping down to 10 or 15 producers as Henry was slashing the price of the Model T. The Great Depression hit, and we are down to the big three and several independents. For EVs, Tesla bolted out of the gate, the small three are in a mad dash to keep up. Europe was caught flat footed due to the VW scandal. Lucid, Lordstown, & Rivian are scrambling to up production to generate cash. Now the EV leader has taken a page from the Model T and is slashing prices putting the rest of the EV market in a tail spin. Deja vu……
- Michael Eck With those mods, I wonder if it's tuned...
- Mike-NB2 I'm not a Jeep guy, but I really, really like the 1978 Jeep Cherokee 4xe concept.
Toyota has mostly been under very good management since...forever. They make a wide range of vehicles which are known throughout the world for having very high average reliability. This is a spectacular achievement and covers a lot of blemishes. Few, if any, competitors can say the same (Honda?).
GM's strategy of culling under-performing/profit-draining markets has paid off during this global crisis. So has ToYoCo's strategy of pro-longed life-cycles and/or minimal powertrain upgrades which has saved cash and allowed Toyota to build up a huge cash reserve.