Toyota Eyes 35 Percent Drop in Profit After Quake
Toyota Motor Corp., the world’s biggest carmaker, on Friday said that its annual profit may drop by 35 percent this year as the Japanese automotive giants struggled to cope with the blow of the March 11 earthquake and tsunami.
The world’s largest carmaker Toyota Motor Corp. on Friday said it expect much larger decline in its annual profit following the March 11 earthquake and tsunami that has rocked the northeastern Japan.
In a report, Toyota officials forecast a 35 percent drop in its annual profit for this year as the Japanese carmaker struggled to restore operations after the twin disaster. The company also said that stronger yen was making it more difficult to keep production lines operational.
Many analysts said that disruptions in output would likely displace Toyota as the biggest automaker in the world this year.
But Toyota remained confident that it can resume full operations by November 2011 as recovery in the supply chain for vital car parts started to pick up in June, adding that it can catch up with its losses once production lines is running 100 percent.
One encouraging development was from Renesas Electronics Corp., the world’s biggest microcontroller manufacturers, which expects to restore supply capacity by the end of September – one month early than it has previously announced.
Renesas were among the hardest hit by the earthquake, causing major halt in its auto parts manufacturing facilities, which caused the biggest bottlenecks in the worldwide car production chain.
According to Toyota, the only remaining problem now, before it can restore full operations, was the strong currency exchange rate of its yen. The company is now calling on the Japanese government to take action to curb its effect to the country’s manufacturing sector.