Tokyo - Toyota this week posted a worse-than-expected 25% drop in quarterly profit and cut its annual output target, as the Japanese firm battles surging material costs and a persistent semiconductor shortage.
The world's biggest carmaker by sales also warned that it remained difficult to predict the future after posting its fourth consecutive quarterly profit decline, underlining the strength of business headwinds it faces.
During the coronavirus pandemic, Toyota fared better than most carmakers in managing supply chains, but it fell victim to the prolonged chip shortage this year, cutting monthly production targets repeatedly.
Kumakura said the global vehicle chip shortage continues, as chipmakers have prioritised supplies for electronics goods such as smartphones and computers, while natural disasters, Covid-related lockdowns and factory disruption have slowed a recovery in chip supplies.
He also said the supply of older-type semiconductors, that attract little capital investment currently, would remain tight.
Production rebounded by 30% in the quarter, but the company warned last week shortages of semiconductors and other components would continue to constrain output in coming months.
Toyota said it now expects to produce 9.2 million vehicles this fiscal year, down from the previously forecast 9.7 million but still ahead of last financial year's production of about 8.6 million units.
Reuters reported last month Toyota had told several suppliers it was setting a global target for the current business year to 9.5 million vehicles and signalled that forecast could be lowered, depending on the supply of electromagnetic steel sheets.
The yen has plunged around 30% this year against the US dollar, but the benefit of the cheap yen - making sales overseas worth more - has been offset by soaring input costs.
Toyota retained its conservative profit outlook, sticking to its full-year operating forecast of 2.4 trillion yen (R300bn) for the fiscal year through March 31 - well below analysts' average forecast of 3.0 trillion yen.
Toyota, once a darling of environmentalists for its hybrid petrol-electric models, is also under scrutiny from green investors and activists over its slow push into fully electric vehicles.
Just a year into its $38 billion (R689bn) EV plan, Toyota is already considering rebooting it to better compete in a market growing beyond its projections, Reuters reported last month.
In a reputational hit, Toyota had to recall earlier this year its first mass-produced all-electric vehicle after just two months on the market due to safety concerns, and suspend production. It restarted taking leasing orders last month for domestic market.
Toyota reiterated on Tuesday that battery-powered EVs are a powerful weapon for decarbonisation, but that there are various other options to achieve the goal.
Reuters
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