Toyota profit forecast more than doubles amid China pandemic rebound

In this news, we discuss the Toyota profit forecast more than doubles amid China pandemic rebound.

TOKYO (Reuters) – Toyota Motor Corp 7203.T more than doubled its full-year operating profit forecast on Friday, as vehicle sales rebound in China after a coronavirus pandemic earlier this year, which has contributed to a 24% drop in second quarter results.

Japan’s leading automaker said it now expects operating profit of 1.3 trillion yen ($ 12.6 billion) for the year through March 2021, compared with 500 billion it he had predicted previously. Operating profit for the previous year was 2.47 trillion yen.

That exceeded the average estimate of 1.25 trillion yen for the annual profit of 26 analysts polled by Refinitiv.

For the second quarter, July through September, operating profit fell to 506 billion yen from 662.4 billion in the same period a year earlier, according to Reuters calculations, as sales fell in the middle of the impact of the coronavirus around the world.

Still, the numbers are already showing progress from April-June, CFO Kenta Kon said.

“If you compare the second quarter to the first, you can see a dramatic recovery,” Kon said during an online press briefing.

The maker of the RAV4 sport utility vehicle (SUV) crossover and gasoline hybrid Prius now expects to sell 9.42 million cars this year – up 3.5% from previous forecast of 9.1 million this year, but still well below sales of 10.46 million last year.

Although still weaker than last year, demand rebounded, particularly in China, the world’s largest auto market. Toyota and its rivals are placing their hopes of recovery in commercial markets as China recovers from the pandemic faster than other countries.

Overall vehicle sales in China in September rose 12.8%, a sixth consecutive monthly gain, even though sales were still 6.9% lower than the same period a year earlier.

Toyota has seen demand increase in China for its electric cars and its luxury brand Lexus.

A senior Toyota official in China said in September that annual global sales of electrified vehicles could reach 5.5 million by 2025, five years earlier than originally forecast.

(1 USD = 103.5700 yen)

Reporting by Tim Kelly; Edited by Kenneth Maxwell

Original © Thomson Reuters

Originally posted 2020-11-06 12:06:10.

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