Car giant shaken by Japanese earthquake

3 August 2011

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3 August 2011 | Angeline Albert

First quarter profits for the Toyota Motor Corporation have plummeted by almost 100 per cent as a result of the impact on its operations of March’s tsunami in Japan.

The car manufacturer’s net profits, for the three months to the end of June, fell from 190.4 billion yen (£1.5 billion) in the same period last financial year to 1.1 billion yen (£8.6 million), following a decline in vehicle sales – a 99.4 per cent fall.

In a statement about the results published yesterday, Toyota’s senior managing officer, Takahiko Ijichi, said: “In Japan and North America where the effects of the earthquake were particularly serious, vehicle sales declined substantially. In the Asia region, despite the impact of the earthquake, we were able to maintain a similar level of vehicle sales as the previous year in countries led by Indonesia.”

Fluctuations in currency exchange rates (particularly in relation to the value of the Japanese yen, euro, US dollar, and British pound) also contributed to the fall in profits.

In Japan, vehicle sales totalled 292,000 units, a decrease of 208,000 compared with the same period in the last financial year. Consolidated vehicle sales around the world for the first quarter totalled 1,221,000 units, a drop of 599,000 compared with the same time last year.

Ijichi added: “Toyota remains committed to pursuing an improvement of its earnings structure globally through cost reduction activities in which it has strong track record, and to utilising every opportunity to increase production and sales outlook.”

Toyota’s belief that it will improve its earnings was reflected by a revised consolidated vehicle sales forecast for the full financial year ending 31 March 2012 from 7,240,000 to 7,600,000 units. This is an increase of 360,000 from its forecast announced in June. It also revised its consolidated forecasts for the 2012 financial year to a net income of 390 billion yen (£3.1 billion).

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