Japanese supply chain disruption cuts Toyota profits

12 May 2011

12 May 2011 | Angeline Albert 

Supply disruption to Toyota’s car production caused by the Japanese earthquake has contributed to the company missing profit forecasts by ¥81.8 billion (£620.8 million).

In results for the 2011 financial year published yesterday, the automotive manufacturer said suspension of vehicle production and a fall in a number of sales caused by the earthquake in Japan last March meant it made less profit than it had expected.

The company made an operating profit of ¥468.2 billion yen (£3.5 billion) against a predicted ¥550 billion (£4.1 billion).

Car manufacturers have been forced to cut production at plants because of supply chain disruption such as compulsory power cuts and problems getting parts to factories. Toyota said production was not expected to return to normal until November at the earliest.

Akio Toyoda, president of Toyota said in a statement: “In Japan, we are currently operating at about 50 per cent. We will mark that as the low point from which we intend to increase production. As for production outside Japan, we are currently producing at about 40 per cent. To all the customers who made the decision to buy a vehicle made by us, I sincerely apologise for the enormous delay in delivery.”

The company statement added it “is carefully monitoring the situation in each region and for each vehicle model and is every day working its hardest to identify every way to restore production as much as possible.”

Toyota chose not to report other fiscal forecasts for the year ahead, because it said it needed more time to understand the full impact of the earthquake.

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