TM Toyota Motor Corporation

By Sean McLain 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (August 7, 2020).

TOKYO -- Toyota Motor Corp. sees sales rebounding from the coronavirus pandemic faster than it initially expected, leading the company to bolster its sales projections and forecast a nearly $7 billion profit for the full year.

The company said Thursday that it sold around 200,000 more vehicles than anticipated in the April-to-June quarter. It now expects to sell 7.2 million vehicles in the financial year ending in March, up from a May forecast of seven million but still well below the previous financial year's total of nearly nine million. Those figures mostly don't include vehicles sold through Toyota's joint ventures in China.

Toyota said it expected global sales to reach year-earlier levels by the end of 2020 and to start growing early in 2021. For the year ending in March, it forecast net profit of Yen730 billion ($6.9 billion), a 64% decline, while revenue is expected to decline 20% to Yen24 trillion ($227 billion).

A company official said strong performance in China, where sales are already rising compared with year-earlier levels, was a key reason for the company's relative optimism. But he said the U.S. and Europe were recovering as well.

"The pace of recovery is faster than expected in each of our regions," he said.

In the U.S., one of Toyota's biggest problems is getting enough cars to dealers. There was a 41-day supply of Toyotas in July, compared with 115 days in April, according to Jefferies. A healthy level is generally thought to be around 60 days, showing that the company has quickly gone from a glut to a shortage.

Toyota now says its U.S. sales recovery rests on whether it can manufacture enough vehicles.

The results underline the relative health of Toyota compared with its peers. Honda Motor Co., a company half Toyota's size, is forecasting a profit of slightly more than $1.5 billion for the current financial year. Nissan Motor Co., in the midst of a restructuring, has projected a net loss topping $6 billion.

Car makers around the world faced a crisis after lockdowns associated with the pandemic cut foot traffic to dealers. The focus shifted to survival as they threw out growth plans and hoarded cash.

Toyota was one of the first companies to talk about a recovery plan. In May, Toyota Chief Financial Officer Kenta Kon said he believed the market had already hit rock bottom and would rebound. At the time, it was a bullish prognosis. Now, most car makers believe sales will continue to rebound.

General Motors Co.'s finance chief said last week that GM could post $4 billion to $5 billion in operating profit in the second half of 2020 if U.S. car sales remain resilient and Covid-19 doesn't disrupt factories. Tesla Inc., which recently surpassed Toyota as the world's most valuable car company, also reported a surprisingly large profit in the April-to-June quarter.

Write to Sean McLain at sean.mclain@wsj.com

(END) Dow Jones Newswires

August 07, 2020 02:47 ET (06:47 GMT)

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