May 14, 2020 (IAM Newswire via COMTEX) -- Toyota Motor Corporation /zigman2/quotes/200537742/composite TM +1.10% gave an optimistic prognosis when reporting its fourth quarter results, believing the worst of the economic impact from the coronavirus pandemic was over and expecting that at its biggest markets at least, sales could rebound even by the year-end.
Volkswagen AG /zigman2/quotes/204431732/delayed VWAGY +2.28% Chief Financial Officer Frank Witter said on April 29 that “no one has a clear visibility on the duration and severity of this crisis. As a general idea, majority of auto makers are focusing their efforts to pile up cash and consequently decreasing spending to ensure they can survive a prolonged downturn. Out of Detroit's big carmakers, General Motors /zigman2/quotes/205226835/composite GM +3.14% has learned the hard way from the 2008 downturn leading the way ahead of Ford Motor Company /zigman2/quotes/208911460/composite F +4.95% and Fiat Chrysler N.V. /zigman2/quotes/204248628/composite FCAU +2.09% as they are gearing up to restart production in North American factories as of May 18 [th] whereas Toyota and Honda Motor Co Ltd /zigman2/quotes/207173990/composite HMC +0.50% restarted production at some of their U.S. plants on May 11 and Tesla /zigman2/quotes/203558040/composite TSLA +1.32% defying county orders by resuming operations at its California plant.
When it comes to plummeting sales, Toyota and Honda paved the way with 54% each, Hyundai had a 39% drop in April sales and only 10% for Fiat and 7% for General Motors' U.S. sales in the first quarter when compared to from a year ago.
Toyota's Q4 and full year earnings report that ended in March
As for the full year, revenue of $278.5 billion was pretty much flat when compared to last year, but net profit did rise slightly to $19.3 billion.
As a product of a decade-long cost-cutting effort, Toyota gathered a $74.4 billion cash stockpile. Net profit declined 86% to $587 million for the January-March quarter but that was better than of its competitors. It is double of the $292 million net profit reported by GM for the same period whereas others faced losses such as Honda Motor that reported a net loss of $274 million for the quarter on Tuesday and didn't give any outlook due to not being certain when could sales rebound.
As for the year ending in March 2021, Toyota expects both revenue and sales volume could fall around 20% in with nearly 80% drop in operating profit to $4.7 billion.
Although it might delay the introduction of new models to save on cash, research and development spending will be kept steady this year.
The results confirm that Toyota has indeed succeeded into creating an unsinkable ship since 2009 which brought its very first loss in decades. The decade-long efforts have enabled Toyota to weather downturns such as this one.
While others are way more cautious and tiptoeing around a turnaround schedule, Toyota’s prognosis was among the sunniest offered by auto makers after months of a COVID-19-induced economic shutdown. But the global car industry has been witnessing a slump for the past few quarters, which was only further worsened due to the coronavirus outbreak. China is slowly reopening with almost 99% of dealerships reopening their doors and with U.S. factories preparing to restart production, carmakers may finally start bouncing back but this year is far from done when it comes to challenges ahead. Yet Toyota has made quite a cushion to face them.
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