Subaru forecasts weakest annual profit in 9 years due to coronavirus

·2 min read

TOKYO Subaru Corp on Tuesday forecast its annual operating profit would drop to a nine-year low this year as it expects to take a sales hit in the United States, its largest market where the number of coronavirus infections continues to climb.

Japan’s seventh-biggest automaker by sales expects annual operating profit to sink 62% to 80 billion yen ($754.3 million), its lowest since the 2011/12 financial year, and weaker than the 133 billion yen average of 19 analyst estimates compiled by Refinitiv.

It posted an operating loss of 15.7 billion yen in the April-June quarter, its biggest quarterly operating loss in nearly 11 years due to a halving in global vehicle sales.

Global automakers are taking a big hit from the coronavirus outbreak, which shuttered vehicle factories earlier in the year and has kept customers out of car dealerships, leading to a drop in production and sales.

In the year to March, the maker of the Outback and Forester sport-utility vehicle crossovers expects to sell 900,000 cars, 13% less than last year.

For the just-ended quarter, Subaru’s operating profit took a hit as global vehicle sales fell to 133,100 units, down sharply from 262,600 in the same period last year. Sales in the United States, which comprises two-thirds of the automaker’s global sales, fell 49% to 91,100 units.

Even as Subaru braces for a profit drop this year, it is weathering the coronavirus outbreak better than rivals including Nissan Motor Co Ltd, Mitsubishi Motor Corp and Mazda Motor Corp, each of which last week forecast record operating losses for the year.

($1 = 106.0900 yen)

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