Toyota ups sales forecast as recovery quickens

TOKYO－Toyota on Friday almost doubled its full-year forecasts, saying sales and production were recovering quickly from the coronavirus pandemic, which has shredded the global auto market.

Japan's top carmaker now projects a net profit of 1.42 trillion yen ($137 billion) for the fiscal year to March 2021, up from an estimate of 730 billion yen.

It said full-year sales are now expected to hit 26 trillion yen, against an estimate of 24 trillion yen.

Results for the first half of this year appeared sluggish compared with 2019, with net profit down 45.3 percent at 629.4 billion yen.

But signs of recovery were clear in the second quarter, with bottom-line profit at 470.5 billion yen against 158.8 billion yen in the first quarter, when the pandemic was hitting hard.

Carmakers around the world have been battered by coronavirus. Many are relying on government help, as the pandemic slammed the global economy into reverse and forced people to stay at home.

But last week, Toyota reported both global production and sales had hit record highs for September. It marked the first gains in nine months.

"The impact of the pandemic has yet to be fully erased, but Toyota swiftly recovered in the July to September period," said Satoru Takada, auto analyst at TIW, a Tokyo-based research and consulting firm.

"While we can't be too optimistic, both sales and production are still on course to recovery," Takada told AFP ahead of the results.

"Given the severe business environment, Toyota is outperforming its domestic rivals," he added.

On Thursday, US giant General Motors reported a 72 percent increase in third-quarter profit as it cited strong recoveries in the US and China.

German automaker Volkswagen also said last week it booked net profit of $3.2 billion in the three months to September. This compares with a loss of 1.5 billion euros ($1.77 billion) in the preceding three months.

Toyota's smaller domestic rival Nissan is scheduled to announce its first-half earnings next week. It will come three months after Nissan warned of a massive $6.4 billion net loss for the current fiscal year.

The consequences of a return to lockdowns in Europe and tightened restrictions elsewhere as coronavirus infections surge remains to be seen.

"The duration of the global spread of COVID-19 and the resulting future effects are uncertain," Toyota warned.

"The ultimate impact ... (is) difficult to predict and could have an adverse effect on Toyota's financial condition and results of operations."