AutoBeta(AutoBeta.net)02/11 Report--

2020 will be an unprecedented impact on the global auto market. Sales of many car companies have declined as a result of the COVID-19 epidemic, but judging from the latest results recently released by the three major Japanese car companies, Toyota and Nissan have achieved profit growth. Only the Honda brand has declined.

Toyota, as the best performer of the three major car companies, according to its financial results for the third quarter of fiscal 2021 (which ended December 31, 2021), Toyota's sales revenue in the third quarter of fiscal 2021 was 8.15 trillion yen, compared with 7.61 trillion yen in the same period last year. Net profit was 867.508 billion yen, compared with 586.193 billion yen in the same period last year. The net profit attributable to the company was 838.696 billion yen, compared with 559.298 billion yen in the same period last year.

The company expects full-year revenue in fiscal 2021 to reach 26.5 trillion yen, down 11.3 per cent from a year earlier, while net profit attributable to the company is 1.9 trillion yen, down 6.7 per cent from a year earlier.

However, Toyota still raised its full-year operating profit target for fiscal 2021 to 2 trillion yen (120 billion yuan), well above Toyota's previous forecast of 1.3 trillion yen (80 billion yuan) and analysts' 1.542 trillion yen (100 billion yuan).

It is also worth noting that in the current market "lack of core" environment, Toyota raised its previous target of 3.3 per cent growth of 9.42 million vehicles to 9.73 million vehicles, which is still lower than last year's 10.46 million vehicles, but also reflects Toyota's market confidence.

Of course, this is also inseparable from the rising sales of the Toyota brand in the Chinese market. Toyota sold 1.797 million vehicles in China in 2020, an increase of 10.9% over the same period last year. Colleagues who have outperformed the market have also surpassed Honda and Nissan to become the top Japanese car sales in the Chinese market.

The day before Toyota released its results, Honda and Nissan also released quarterly results. Of this total, Honda's operating profit in the third quarter was 277.7 billion yen, up 67% from a year earlier, far exceeding market expectations, thanks to a rebound in car demand in the second half of 2020. In the first three quarters of the fiscal year, the company's operating profit fell to 447 billion yen from 639.25 billion yen a year earlier, down 30 per cent from a year earlier.

Nevertheless, Honda raised its full-year operating profit forecast to 520 billion yen from 420 billion yen in the previous year under the negative impact of COVID-19 and a shortage of semiconductors.

But in terms of sales, Honda cut its sales plan for fiscal year 2020 (April 2020 to March 2021) to 4.5 million vehicles, down 6 per cent from a year earlier. Because as Honda's largest single market and the most profitable American market, only 1.048 million sales have been affected by multiple factors this year, down 16% from the same period last year. Although the market advantage has recovered, it is relatively slow, far lower than the same period last year. On the other hand, the Chinese market surpassed the American market, with cumulative sales of 1.405 million vehicles under the environment of gradual recovery in the domestic market, an increase of 15% over the same period last year, which greatly exceeded the previous performance expectations. In this regard, under the gradual recovery of the two major markets, Honda's expectation of performance improvement was given.

By contrast, Nissan is clearly not so good. Thanks to the rebound in car demand in the second half of 2020, especially the performance of the Chinese market, Nissan's operating profit rose to 27.1 billion yen in the third quarter to December 31, 2020, up from 22.7 billion yen a year earlier, according to Nissan's results.

Although revenue increased year-on-year, net profit was at a loss and expanded to 37.8 billion yen from 26.1 billion yen in the same period last year, down 11.7 per cent from a year earlier. The net loss in the first nine months reached 367.7 billion yen.

The company said that as a result of the recovery in third-quarter results, consolidated operating losses and operating profit margins were improving, business structure reforms such as fixed fee cuts were moving faster than expected, and net losses had shrunk.

There are also media reports that Nissan is planning to cut fixed costs through plant closures and layoffs, which will also help reduce losses.

According to the latest adjustment, Nissan has cut its sales forecast for the whole of fiscal 2020 to 4.015 million, 3.6 per cent lower than its previous forecast. In 2020, Nissan declined year-on-year in almost all countries due to the epidemic, including China, Nissan's largest market. According to data, Nissan sold 4.029 million new cars worldwide in 2020, down 22.2% from the same period last year (non-financial statistics), of which 1.457 million were sold in China, down 5.8% from the same period last year, the smallest decline.

COVID-19 epidemic and the global lack of core problems have undoubtedly brought a significant impact on car companies, but for strong brands such as Toyota, it does not seem to have much impact. With strong signs of brand recovery, Toyota is clearly confident of achieving full-year results and sales growth, which is clearly not for Honda and Nissan.

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