AutoBeta(AutoBeta.net)05/19 Report--

Subaru Motor Co., Ltd. reported on Monday that operating profit rose 15.7 percent to 210.3 billion yen (13.9 billion yuan) in the fiscal year ended March, while net profit rose 7.9 percent to 152.6 billion yen (10.1 billion yuan). Subaru's operating profit rose to 57.7 billion yen (3.7 billion yuan) in the fourth quarter, while net profit rose to 40.9 billion yen (2.7 billion yuan). From the perspective of financial data, Subaru performed slightly better than other Japanese automakers, showing an increase in operating profit and net profit, even though it was seriously affected by the epidemic in the fourth quarter.

However, due to the continued spread of the epidemic around the world, global car consumption and activities have stagnated, the future development trend is still unclear. In this context, Subaru's development is hardly optimistic. Zhimei Nakamura, chief executive of Subaru, said the new pneumonia outbreak had a limited impact on performance in the year that just ended. But although we have resumed factory production this month, there is only one production shift in Japan, and production in the United States has slowed significantly. "

Affected by the epidemic, many countries have implemented "home isolation orders" to curb the spread of the epidemic, factories have stopped production and demand for cars has fallen sharply. Although Subaru has restarted production at some car plants, weak demand and supply chain disruptions have limited production in the coming months. Data show that Subaru's cumulative global sales rose 3 per cent to 1.03 million vehicles in the 2019 fiscal year to March, with 2Univer 3 selling in the US, where it sold 700000 new cars last fiscal year.

Subaru said sales were expected to be hit in the coming months as the US epidemic is still in a state of pandemic. In addition, it will take some time to restart production in the United States, which is expected to produce only 5000 vehicles in May, down from 40000 in the same period last year. The Indiana assembly plant, Subaru's only assembly plant in North America, employs about 6000 people and mainly produces Subaru Tiger, Ascent, Lion and Wing Leopard. The company had expected to produce 410000 cars in 2020, but the plant has been shut down since March because of the outbreak.

Japanese carmakers are preparing for a year of falling car sales, with analysts predicting that demand for new cars will recover very slowly as unemployment rises and consumer incomes fall. Japanese car sales will slowly recover from the epidemic.

The decline in demand for new cars since March has slashed the global sales of Japanese carmakers, which fell 7.3 per cent to 26.5 million units in the fiscal year to March, the latest in four years. Chris Richter, a senior analyst at CLSA, expects the decline in sales by Japanese carmakers to continue, with a decline of about 35 per cent in fiscal year 2020. At the same time, most Japanese automakers affected by the epidemic are likely to report annual operating losses in fiscal year 2020.

In response to the impact of the epidemic, Subaru has obtained a credit line of 200 billion yen from lenders. The company's free cash flow has been improving over the past year, but Subaru's cash flow will be hit by the outbreak.

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