Toyota and Honda Double Their Profits in Q3, Suzuki Suffers from Weak India Sales

By Mariliana Fotopoulou Friday, November 6, 2020

A few days after BMW, Ferrari, FCA, and PSA all recorded robust growth in the third quarter, their Asian counterparts Toyota and Honda also reported higher-than-expected earnings on the back of strong demand for new vehicles in China.

Toyota Tops Market Estimates

Toyota’s operating profit in the period between July and September slipped to ¥506 billion ($4.89 billion) from ¥662.4 billion ($6.40 billion) compared to a year ago.

Toyota substantially lifted its full-year operating earnings on Friday, thanks to a sharp recovery in sales in the Chinese market following the coronavirus outbreak in March, which sent the automaker’s profit downward 24% in the second quarter.

“If you compare the second quarter to the first you can see a dramatic recovery,” Kon said.

According to the new forecast, Toyota projected a full-year operating profit of ¥1.3 trillion ($12.57 billion) for the fiscal year to March 2021, compared to the previous forecast of ¥500 billion ($4.83 billion). Toyota’s operating profit last year amounted to ¥2.47 trillion ($23.89 billion).

The new guidance beat the consensus estimates for the full-year earnings of ¥1.25 trillion ($12.08 billion). However, the automaker’s CEO, Kenta Kon, still picked up some ground when compared to the period from April to June.

“Investors are looking at how Toyota is faring overseas and given the yen’s appreciation (versus the dollar) and a resurgence of the coronavirus, we have to consider the (profit forecast) revision cautiously,” noted Kazuo Kamiya, a fund manager at the Japanese financial services company Nomura Securities.

Toyota said it expects to ship 9.42 million vehicles this year, 3.5% higher than the last forecast of 9.1 million this year, but still much lower when compared to the same period last year.

Honda Joins the Recovery Club

Honda Motor Co. also more than doubled its operating earnings outlook for the full year following a 28% recovery in its profit in China in Q2. As a result, the carmaker upgraded its full-year operating profit of ¥420 billion ($4.06 billion), compared to the previous forecast of ¥200 billion, beating the consensus estimates of ¥254.6 billion ($2.46 billion) profit.

In Q2, Honda’s operating profit amounted to ¥283 billion, compared to ¥220 billion in the same period in 2019. Honda estimated to ship 4.6 million cars during the full fiscal year, compared to its last forecast of 4.5 million, but under the 4.79 million the company sold in 2019.

Like Toyota, Honda has also shifted their focus towards the Chinese market, the largest auto market globally, and the leader when it comes to worldwide demand recovery after a devastating period that followed after the coronavirus outbreak.

Following the steps of other carmakers, Honda is also looking to make a transition toward electric and zero-emission vehicles. This plan was reflected in its recent decision to stop supplying its engines to the FIA Formula One World Championship.

Suzuki Suffers From Weaker Demand in India

In contrast to Honda and Toyota, Suzuki Motor Corp said yesterday it estimated its operating profit to decline by about 25% to ¥160 billion ($1.54 billion) for the financial year through March 2021, as a result of a plunge in its sales amid the pandemic.

Suzuki reported an operating profit of ¥73.6 billion ($711 million) for the quarter through September 30, beating the ¥55.9 billion ($540 million) profit reported last year.

The forecast was higher than consensus estimates of ¥124.3 billion ($1.20 billion) provided by 14 analysts. Suzuki projected to ship 2.38 million cars globally, 16.6% less than in the last year.

The carmaker’s sales in its core market in India dropped 36% to 432,000 vehicles, in addition to a plunge in other markets such as Japan, Indonesia, and Europe.

“We don’t know what will happen with the coronavirus in India or what measures the government will implement, so that makes the market difficult to predict,” said Toshihiro Suzuki, the President of the fourth-largest carmaker in Japan.


Japanese top carmakers Toyota and Honda more than doubled their full-year profit forecasts thanks to a sharp surge in demand in the key market in China, while Suzuki said it expects its annual profit to drop by a quarter amid weakening sales in India.

About the Author

Headshot for author Mariliana Fotopoulou

Mariliana has an MSC in consumer analytics and business strategy. She has a special interest in fast-moving industries and big data.

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