The impact of the novel coronavirus has severely dented global demand for vehicles. Toyota Motor Corp, one of the world’s most profitable carmakers, expects its annual operating profit to plunge by 80%, its lowest figure in nine years. Even such a giant car manufacturer has fallen prey to the coronavirus-driven crisis.
Japan's biggest automaker warns that its losses may total 1.5 trillion yen ($13.95bn) due to a drop in global vehicle sales this year. The company points out that the coronavirus delivered a bigger shock to the car industry than the global financial crisis of 2008.
"We anticipate a big drop in sales volumes, but despite that we are expecting to remain in the black," Toyota President Akio Toyoda reported. The company supposes that in the near future, car sales will get back on track. Under such a scenario, Toyota will significantly minimize its net operating losses.
Japan's automaker expects to sell 8.9 million vehicles globally versus 10.46 million in the previous year. According to preliminary estimates, the company lost 160 billion yen in operating profit due to the pandemic.
However, despite the reduction in profit and a sharp decrease in margins, Toyota plans to allocate more than 1 trillion yen for capital expenditures and investment in innovative developments.
