June 24, 2024

Toyota beat Honda profit margins but warns of extended chip crisis

3 min read
  • Toyota has stopped production at a Guangzhou tax base
  • On August 3, Honda stopped production at Wuhan
  • Toyota has a full-year car sales, profit-oriented outlook
  • Honda raises full-year guidance by 18%, lowering car sales forecast

Tokyo, August 4 (Reuters) – Toyota Motor Corp. (7203.T) Recorded quarterly earnings and Honda Motor Company (7267.T) The pair teamed up with other automakers on Wednesday to boost its annual profit forecast as post-lock sales increased, but warned that a global chip shortage would persist.

The resurgence in the Covid-19 cases has disrupted parts and production at car companies, adding to the chip crisis triggered by a month-long epidemic. read more

Two Japanese carmakers are facing production problems in China, which announced the most domestically spread COVID-19 cases since Wednesday January.

Honda Managing Vice President CG Qureshi told reporters that production was halted at its plant in Wuhan on August 3 due to a Govt-19 gas cluster formed in the supplier. He said the stop was not expected to last long.

Toyota has discontinued production in an assembly line in Guangzhou, which operates with its Chinese partner Guangzhou Automobile Group Limited (601238.SS), Someone familiar with the matter told Reuters on Wednesday.

The person, who declined to be named for secret reasons, could not say when the suspension began, how long it lasted, or which models were affected.

In Thailand, too, Toyota, the world’s largest automaker, had to halt production at three factories last month due to a shortage of parts related to the epidemic. read more

However, the company maintained its forecast of sales of 8.7 million cars for the year ending March 2022, and said sales volumes in the first quarter had crossed the 2019 level.

Toyota shares fell 2% and closed 0.9%, with some investors disappointed that the company did not raise its profit margin despite breaking the first-quarter market estimate.

With the sale, Honda, Japan’s No. 2 automaker, reduced its sales volume outlook from 5 million to 4.85 million vehicles, but raised its full-year forecast after double-analyst expectations for first-quarter operating profit. read more

“We have revised our sales volume outlook downwards due to the Govt renaissance around the world, but focused on Asia, and the impact of the chip shortage,” Qureshi told reporters.

A man passes the Toyota logo on October 24, 2019 in Tokyo, Japan at the Tokyo Motor Show. REUTERS / Edgar Su / File Photo

“However, we decided to revise our operating profit forecast for the current year … because we believe we can absorb those negative effects by cutting costs.”

Toyota also said cost-cutting would help.

Chip Wrinkles

“From the chip shortage, to a coveted uprising in Southeast Asia, demand growth in China is a recession, as well as a sharp rise in material costs – this is a strong quarter,” Masayuki Kubota said. Securities Inc.’s chief strategist refers to Toyota.

Toyota may reconsider its outlook after the first half.

The company’s operating profit rose to 997.49 billion yen ($ 9.15 billion) for the three months ended June 30, from the first quarter of last year, beating analysts’ estimates by 752 billion yen.

Toyota has outperformed its competitors due to the chip crisis.

In March, Reuters reported that the Japanese company had benefited from a series of business plans created by suppliers to store chips in the wake of the 2011 Fukushima earthquake. read more

The global semiconductor chip shortage will cost automakers $ 110 billion in lost revenue this year, consulting firm Alexpartners said in May. read more

BMW (BMWG.DE) And Stellandis (STLA.MI) On Tuesday it warned that the deficit would drag on into next year, affecting production and sales despite rising auto demand in markets such as the United States. read more

On Tuesday, General Motors Co. (GMN) He said many North American plants would close due to shortages. read more

($ 1 = 109.0400 yen)

Report by Maki Shiraki in Tokyo and Norihiko Shirozi in Beijing; Written by Jamie Fried; Editing by Kirsten Donovan Muralikumar Anandaraman and Sayantani Ghosh

Our standards: Thomson Reuters Foundation Policies.

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