Toyota Hikes Profit Forecast 54%, Shrugs Off Global Chip Supply Issues
Toyota Motor Corp said on Wednesday it has an up to four-month stockpile of chips and was not immediately expecting a global chip shortage to hit production, as it jacked up its full-year earnings forecast by a bigger-than-expected 54%. Reuters reports that unlike other automakers, including Japanese peers Nissan Motor Co Ltd and Honda Motor Co Ltd, that have had to cut production because of semiconductor shortages, Toyota raised output for the fiscal year ending March. Shares in Toyota, the world’s biggest automaker by vehicle sales, closed up 1.7% after hitting their highest level since July 2015. “For the near term, we do not see any decrease in production volume due to the chip shortage, but we do see risks of a chip shortage,” Chief Financial Officer Kenta Kon said during a briefing. Read more here (Source: Reuters).
U.S. Throughput Lowest Since 2012
The average number of new vehicles sold by U.S. dealers fell last year to its lowest level since 2012 as the COVID-19 pandemic strained consumer demand and the dealership population dropped slightly, reports Automotive News. The figure, known as throughput, declined in 2020 by 133 vehicles to 807, according to Urban Science's annual Automotive Franchise Activity Report. Eight years earlier, the number was 812. From 2013 to 2019, throughput rose as high as 966 and as low as 874, according to the report. In 2009, the final year of the Great Recession, throughput was 564. Last February, before the coronavirus was declared a pandemic, Urban Science had forecast a throughput decline for 2020, but only by 14 vehicles. U.S. light-vehicle sales fell 14 percent to 14.6 million in 2020, according to the Automotive News Research & Data Center. It was the lowest volume since 2012. Read more here (Source: Automotive News).
Buy a Car with Bitcoin? Some Car Dealers Were Years Ahead of Musk
Georgia car dealer Christopher Basha was way ahead of Elon Musk in embracing bitcoin as a currency for selling vehicles. Reuters reports that he began accepting bitcoin payments in 2015, but no customers were interested. “I almost forgot about it,” he said. In 2017, bitcoin prices surged, and one customer used the cryptocurrency to buy four Kias for a total of more than $150,000, Basha said. Bitcoin payments have been picking up since late last year, with prices rallying. Dealers said accepting cryptocurrency is a good marketing and branding tool. But it is still a niche business. Price volatility and the absence of trusted banks and other financial intermediaries make bitcoin payments a risk for dealers who are not tech savvy. Basha, the Kia dealer, said he converts bitcoin into cash immediately upon receipt because he believes it risky for a company the size of his to hold such a volatile asset. But it does take several minutes to turn bitcoin into U.S. dollars on a payment platform, which occasionally leads to losses averaging $300 to $400 on each transaction due to price movements. Read more here (Source: Reuters).
Honda Raises Full-Year Profit Forecast, in Black for Q3
Japanese automaker Honda Motor Co.’s glass is half full in 2021, raising its full-year operating profit forecast to 520 billion yen, or $5 billion, during the company’s Q3 earnings call Tuesday. The Detroit Bureau reports that the reason for the optimism is strong demand in China and other markets, plus the positive impact of cost-cutting measures the automaker implemented in the last year. Honda enjoyed record-setting production levels outside of Japan in December, including in China and other parts of Asia. Revised up from 420 billion yen, or about $4 billion, the new prediction pushes past analysts’ expectations. Combined with operating profit from financial services business related to automobile sales, the estimated operating profit for automobile business is 205.4 billion yen, the company noted. Honda officials said they expect to sell 4.5 million cars globally during its fiscal year, which ends March 31. That’s down from its early target of 4.6 million units. Read more here (Source: The Detroit Bureau).
GM Warns Chip Shortage Could Cut 2021 Earnings By Up to $2B
General Motors on Wednesday reported fourth-quarter earnings that easily beat Wall Street expectations, but the company warned a global semiconductor chip shortage could cut its earnings by $1.5 billion and $2 billion this year, reports CNBC. Automakers and parts suppliers began warning of a semiconductor shortage late last year after demand for vehicles rebounded stronger than expected following a two-month shutdown of production plants due to the coronavirus pandemic. GM has already temporarily closed car and crossover plants in Kansas, Canada, and Mexico through mid-March due to the shortage. It also has cut production in South Korea. The automaker reported pretax adjusted earnings of $5.3 billion, or $2.83 earnings per share, for the third quarter, while saying the fourth quarter would be weaker due to seasonality. GM reported an adjusted pretax profit of $105 million in the fourth quarter of 2019 due to a 40-day labor strike impacting vehicle production. Revenue was $30.8 billion during that quarter. Read more here (Source: CNBC).
Get with the Dealer Visit Program
Now is the time to build and foster our relationships with decision-makers in Washington and highlight the many positive contributions of international nameplate auto dealers in communities across the country. Watch Chairman Jason Courter’s brief comments on the importance of AIADA’s Dealer Visit Program, and consider signing up to host your member of Congress for a Dealer Visit this year. For more information on the Dealer Visit Program or to sign up, visit aiada.org/dealervisit.
_1820105.jpg)
Around the Web
Watch as Pickup Plunges 70 Feet Off a Snowy, Icy Wisconsin Overpass [Autoblog]
'Cars' Characters Get New NASCAR Looks Ahead of Daytona 500 [GMA]
Hyundai is Getting Serious About Building a 'Walking Car' with Four Legs [The Verge]
Battery Trade Dispute Could Test Biden's Green Policy Plans [Automotive News]
