Japanese automotive mogul, Toyota Motor Corporation recently released its quarterly results showcasing a worse-than-expected 25% drop in profits owing to soaring material costs and a persistent chip shortage, resulting in the company cutting its output target for the upcoming year.
A spokesperson of the company has asserted that it was very difficult to predict the future of the companys profitability after having suffered a fourth consecutive blow on its quarterly remuneration.
Notably, Toyota was one of the most prominent automotive companies that fared considerably better than others during the COVID-19 pandemic in adequately managing supply chain inconsistencies. However, it failed to maintain a decent balance between chip inventory and burgeoning sales, thereby slashing monthly production targets on many occasions.
Toyota’s Chief Accounting Officer, Masahiro Yamamoto is of the opinion that the business landscape is rapidly evolving in the present scenario with dynamic changes in foreign exchange rates, soaring interest rates, and raw material prices.
As per the current statistics, the company expects to produce nearly 9.2 million vehicles this fiscal year, which is marginally down from the estimated 9.7 million but still higher than last year’s production of 8.6 million units.
Apparently, Toyota had issued a public statement for suppliers claiming that it was expecting to oversee an overall target of 9.5 million vehicles while also warning them that the target could be lowered significantly, depending on the supply of steel components.
This statement was further confirmed by the Japanese auto giant’s chief purchasing executive who claimed that the worldwide auto chip shortage continues to plague the company as it reels to revive its sales from repeated COVID-19 lockdowns and natural disasters.
In other news, Toyota is also at loggerheads with several environmental experts and green investors for not completely adopting electric vehicles (EV) in a bid to be in tandem with the environment.
Analysts assert that the company is planning to reconsider its USD 38 billion EV plan, to compete with its rivals who are growing beyond estimations.