Toyota, set to lose its crown as the world's top-selling carmaker this year, more than halved its annual profit forecast to €1.9 billion, reeling from a strong yen and Thai floods that severed its supply lines.
Toyota Motor Corp's inability to make enough cars - production was also ruptured by the earthquake and tsunami in Japan in March - is expected to see it overtaken in sales this year by General Motors Co and probably Volkswagen AG.
While Toyota is poised for record production next year as it rebuilds depleted inventories, the yen's persistent strength against virtually every major currency means profit recovery will continue to be slow given its huge exposure to exports.
"Toyota is hitting a trough," said Cho Soo-Hong, auto analyst at Woori Investment & Securities in Seoul.
"Its market share will recover next year with output normalisation and new model launches, but I don't expect too much from Toyota's earnings as the yen is expected to remain strong because of appetite for safe-haven assets."
Japan's top automaker expects operating profit to fall 57 per cent to 200 billion yen in the year to end-March, well below a consensus forecast of 419 billion yen in a survey of 23 analysts.
The company's previous forecast of 450 billion yen, issued in August, was withdrawn last month after Thailand's worst floods in 50 years cut off the supply of parts to Toyota's factories in 10 countries. It said the floods would effectively cost the company 230,000 vehicles in lost production this business year.
With floodwaters having receded and recovery work under way at Thailand's industrial parks, Toyota has said its production has returned to normal in most regions, leaving just Thailand and South Africa operating at reduced rates. It said today Thai production was expected to return to normal this month.
Toyota projected an annual net profit of 180 billion yen, down 56 per cent from last year and a sharp cut from its previous forecast of 390 billion yen.
Reuters