Toyota Predicts 31 Percent Drop In Profits Due To Japan Quake

Toyota Predicts 31 Percent Drop In Profits Due To Japan Quake

Still struggling in the wake of the March 11 earthquake and tsunami in Japan, which severely disrupted production, Toyota Motor Co has said that it expects it’s full-year profit for 2011 to fall some 31 percent short of original projections.

Net income is expected to decline to some 280 billion yen ($3.5 billion) for the 12 month period ending in March, versus income of some 480 billion yen ($6 billion) for the same period a year earlier. Global vehicle sales are predicted to shrink to some 7.24 million units, versus 7.31 million last year. A strengthening yen is also eating into the company’s revenue.

Nevertheless, Toyota is trying to be optimistic about the future. In Tokyo today, the company’s Chief Financial Officer, Satoshi Ozawa, said “Toyota will do it’s best to recover from the delays in delivery.”

However, there still remain some significant obstacles on the way to recovery. The high value of the yen, almost reaching post World War II levels, is making Japanese industry less competitive against South Korean and European rivals; not helping matters is the fact that  Toyota boasts a greater ratio of vehicle manufacturing in Japan than it’s main competitors such as Honda and Nissan.

[Source: Automotive News]