Toyota Motor’s Sales Revenue and Operating Profit Slightly Decline in Fiscal 2019

Toyota Motor’s consolidated business results for fiscal 2019 were 29.9 trillion JPY in sales, down 1.0% from the previous year, and 2.4 trillion JPY in operating profit, down 1.0% year-on-year. In addition to the Sino-US trade friction, results were also negatively impacted by the outbreak of the new coronavirus. Although the financial results were relatively solid, Toyota expects that the impact of the new coronavirus will appear more strongly from 2020 onward. While there are many uncertainties regarding the financial forecast for fiscal 2020, Toyota has announced that sales will likely decrease by 20% and operating income by 80%.

Looking at the factors behind the decrease in operating income, which dropped by 24.6 billion JPY, although there were some positive factors such as cost improvement efforts and price revision, they could not cover the loss generated by negative factors such as drop in sales and financial operations, exchange rate fluctuations, and increase in labor cost, depreciation and R&D expenses. Of which the impact of the new coronavirus is calculated to be 160 billion JPY. If it had not been for this additional drop triggered by the pandemic, Toyota’s profits could have been 135.4 billion JPY in fiscal 2019.

Looking at sales revenue and operating profit by region, sales and profit increased in Europe, and sales decreased but profit increased in North America. Meanwhile both sales and profit decreased in Japan, Asia and other regions. Strong sales in Europe contributed to rising earnings. Although both sales and production slightly declined in North America, successful business efforts increased operating profit 2.4 times from the previous year. In Japan, both manufacturing and sales exceeded the previous year’s level, but profits declined due to poor model mix and foreign exchange fluctuations. In Asia and other regions, in addition to exchange rate fluctuations, reduced local production and temporary suspension of operations in the fourth quarter due to the outbreak of the new coronavirus had a negative impact on earnings.

Regarding forecasts for fiscal 2020, Toyota has announced forecasts for sales, operating income and global sales. Meanwhile, competitors and system suppliers have postponed announcements. Although there are many future factors such as the impact of the new coronavirus, it easier to formulate internal and external business plans by putting forth target figures.