Toyota says it is expecting its full-year operating profit to drop by 80% to its lowest in nine years as a result of the Covid-19 pandemic, and said it is expecting sales to remain weak for the rest of 2020, with global sales anticipated to drop by more than 1.5 million units compared to last year.

The company has forecast an operating profit of 500 billion yen (RM20.23 billion) for the year through March 2021, down from the 2.44 trillion yen (RM98.7 billion) it achieved in the year just ended, Reuters reports.

“The coronavirus has dealt us a bigger shock than the 2008 global financial crisis. We anticipate a big drop in sales volumes, but despite that we are expecting to remain in the black,” its president Akio Toyoda said last week.

It is forecasting global sales to be at around 8.9 million vehicles this coming year, a significant drop from the 10.46 million units it achieved in the year just ended. It added that sales are not expected to recover to 2019 levels until next year.

It is cutting production as a result of weak consumer demand. In Japan, vehicle production will be reduced by 122,000 units in June, with production being halted at all of its 15 plants for four days next month. It was previously reported that the automaker was scheduled to slash production in North America by nearly a third right through October.

Despite the profit slump and a sharp cut to margins, Toyota said it would pour more than one trillion yen (RM40.4 billion) each into capital expenditure and R&D investment, keeping spending largely unchanged from last year. This was because the company does not want to stop investing in the future, operating officer Koji Kobayashi said.