Toyota Motor Co. reported a worse-than-expected 25% decline in quarterly earnings on Tuesday and lowered its annual production target as the Japanese automaker grapples with rising material costs and a chronic shortage of semiconductors.
The world’s largest automaker by sales also warned of continued difficulty in predicting the future, after posting its fourth consecutive quarterly decline in its profits, indicating the strength of the headwinds of the business it is facing.
“We’ve gotten through the worst of it, but … this isn’t necessarily a situation in which we get all the supplies. I don’t know when the chip shortage will end, “said Kazunari Kumakura, group purchasing manager.
The company’s operating profit in the three months ended September fell to 562.7 billion yen ($ 3.79 billion), well below the average profit estimate of 772.2 billion yen. in a Refinitiv survey of 12 analysts. Toyota’s sales led to a profit of 749.9 billion yen a year ago and the company’s profit was 578.6 billion yen in the first quarter.
The global shortage of chips for auto continues, Kumakura said, as chip makers prioritized supplies destined for electronic products such as smartphones and computerwhile natural disasters, COVID-19 shutdowns and plant outages have slowed the recovery of automatic chip supplies.
He added that old-fashioned semiconductor supplies, which currently attract little capital investment, will remain scarce.
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