Toyota Motor Corp reported the results of the first quarter of the current fiscal year, which began in April and ended in June. In three months, the operating profit of the largest automaker collapsed by 42 percent to 578.66 billion yen ($4.3 billion) from 997.4 billion in the same period in 2021. The reason for this is a prolonged shortage of parts, more expensive raw materials, outbreaks of coronavirus, and other problems forcing to reduce production volumes.
The scale of the fall exceeded the most pessimistic forecasts: analysts predicted Toyota to lose only 15 percent of its profit. After the announcement of the quarter’s results, the company’s share price fell by three percent to 2,091 yen apiece.
Toyota noted that the increase in prices for materials — mainly steel and aluminum — cost the company 315 billion yen. According to forecasts, the total cost of raw materials by the end of the year will jump by 17 percent and amount to 1.7 trillion yen.
However, the demand for cars remains consistently high, which gives hope for the implementation of the plan to produce 9.7 million cars by April 2023. The company expects that the shortage of microelectronics will gradually come to naught, as well as problems with coronavirus at factories, which will gradually increase the volume of assembly in the second half of the fiscal year.
In a difficult first quarter, Toyota had to adjust production plans monthly, reducing them by about 10 percent. Due to the ragged schedule, the company cannot cope with demand and is forced to stop accepting orders for new cars, including a new Land Cruiser, and even cancel applications already collected.
The manufacturer has a lot of other issues: the Toyota bZ4X electric car had to be recalled almost immediately after release, and its “daughter” Hino Motors is threatened with a new “Dieselgate”.