The Toyota logo on one of the company's cars. Photo: AFP

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 this year.

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

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

Results for the first half appeared sluggish compared with the previous year, with net profit down 45.3% at 629.4 billion yen.

But the 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 previous quarter, when the pandemic was hitting hard.

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

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

“The impact of the pandemic has yet to be fully erased, but Toyota swiftly recovered in the July-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 said 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% increase in third-quarter profit as it cited strong recoveries in the US and China.

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

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

Honda is to announce its interim results later in the day.

Japan’s auto industry is closely watching the fate of the US presidential election, which may create a negative impact, including on foreign exchange rates, Takada added.

The impact 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,” the company warned. 

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

AFP

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