Toyota and Honda's profits grow during pandemic year

Despite the ongoing Coronavirus pandemic, both Toyota and Honda managed to grow their profits last year.

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Derek Fung
Derek Fung
Journalist
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While Nissan continues to struggle, both Honda and Toyota managed to increase their profits in the 2020/21 financial year despite much of the world entering Coronavirus-related lockdowns.

Toyota saw its operating profit grow by 10.3 per cent to ¥2.25 trillion ($26.7 billion) for the financial year ending March 2021.

The automaker’s profit growth can largely be put down to smaller expenditures, as well as an on-going cost reduction effort.

With sales falling by 537,000 vehicles or 5.1 per cent to 9.92 million across its Toyota, Lexus, Daihatsu and Hino brands, revenue fell by 9.4 per cent to ¥25.1 trillion ($298 billion).

Interestingly, while Toyota sold roughly the same number of vehicles in Japan (2.13 million) and North America (2.31 million), profit in Japan far outstrips what’s made in North America.

In the lands of apple pie, beaver tails and tacos Toyota made a healthy ¥401 billion ($4.8 billion), while in its homeland profits totalled ¥1.15 trillion ($13.7 billion).

RevenueProfitMargin
Japan¥14.9 trillion
($177.6 billion)
¥1.1 trillion
($13.7 billion)
7.69%
North America¥9.5 trillion
($112.8 billion)
¥401 billion
($4.8 billion)
4.23%
Europe¥3.1 trillion
($37.2 billion)
¥108 billion
($1.3 billion)
3.44%
Asia¥5.0 trillion
($59.9 billion)
¥436 billion
($5.2 billion)
8.63%
Other¥1.8 trillion
($22.3 billion)
¥60 billion
($710 million)
3.20%

With China maintaining strict COVID controls, and much of the developed world vaccinating their way out of the pandemic, Toyota is forecasting further profit improvements, and sales recovering to 10.55 million for the current financial year.

It will be interesting to see if the worldwide semiconductor shortage ends up curtailing the company’s output this year.

Either way, with ¥5.1 trillion ($60.6 billion) of cash on hand Toyota should be right to ride out any storm this year.

Honda managed to beat its own estimates with a profit of ¥657 billion ($7.8 billion) in the 2020/21 Japanese financial year, up ¥202 billion ($2.4 billion) or 44.3 per cent from the year before.

While automobile sales were down slightly 4,546,000, a drop of just 244,000, motorcycle sales fell sharply by 4.2 million to 15.1 million.

Reduced volume naturally led to lower revenue, with Honda bringing in ¥13.2 trillion ($156 billion) last year, a drop of 11.8 per cent.

RevenueProfitMargin
Motorcycles¥1.8 trillion
($21.2 billion)
¥225 billion
($2.7 billion)
12.56%
Automobiles¥8.8 trillion
($104.3 billion)
¥482 billion
($5.7 billion)
5.49%

The company attributes most of its improved profits to reduced selling, general and administrative expenses.

Its financial services division saw profits increase by a shade over 62 per cent to ¥356.7 billion ($4.2 billion).

Honda’s other business category – which includes power products – remained in the red, though. This year’s ¥11.4 billion ($135 million) loss was mainly down to aircraft and airline engine division’s lack of sales during the COVID-19 pandemic.

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Derek Fung
Derek Fung
Derek Fung is a Journalist at CarExpert.
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