Toyota forecasts drop in annual profits

Toyota Motor Corporation has warned that profits could fall by a fifth in the coming year, as higher raw material costs, supply chain issues and the pandemic continued to weigh heavily.

The Japanese car giant said it had temporarily suspended, or planned to, production of cars and components at selected plants in Japan and overseas due to rolling Covid-19 lockdowns China.

Other factors expected to affect Toyota in the current year included rising raw material prices and potential supply chain delays. As a result, the world’s largest car maker is now forecasting operating income of Y2.4trn for the 2023 full year, a 20% decline on 2022, and sales revenues of Y33trn, which would represent a 5.2% drop.

It expects to sell 10.7m vehicles during the year, against 10.3m a year previously.

The updated guidance came as Toyota posted fourth-quarter revenues of Y8.1trn for the three months to 31 March 2022, up 6%. Operating profits, however, fell 33% to Y463bn year-on-year.

Toyota said: "Automotive markets recovered compared with the 2021 full year, as demand remained firm in regions including the US, China and Japan, despite being forced to curb production worldwide due to limited parts supplies caused by the global semiconductor shortages and the impact of Covid-19.

"At the present time, the outlook has become even less clear, as the impact of increased geopolitical tensions from February 2022 onward spread worldwide through a surge in product prices and other ramifications."