Cars

Earthquake hits Toyota profit

By Makiko Kitamura and Yuki Hagiwara (China Daily)
Updated: 2011-05-12 10:41

A Toyota Motor Corp hybrid vehicle on display at the New York International Auto Show last month. Output disruptions may cause Toyota to fall behind both General Motors Co and Volkswagen AG in global sales this year. [Photo / Agencies]

Parts and power shortages slowed resumption of production capacity

TOKYO - The Japanese carmaker Toyota Motor Corp said fourth-quarter profit fell 77 percent after Japan's record earthquake disrupted production and crimped domestic sales.

Toyota reported net income of 25.4 billion yen ($314 million) for the three months ended March 31, compared with the 104 billion yen average of analyst estimates compiled by Bloomberg in the past four weeks. Sales fell 12 percent to 4.64 trillion yen, the company said.

Output disruptions may cause Toyota to fall behind both General Motors Co and Volkswagen AG in global sales this year.

Related readings:  Toyota to resume production in China in June  Toyota quarterly profit slides on quake disruption  Toyota recalls 308,000 SUVs in US to fix airbags  Toyota to cut 50-70% production in China

The natural disaster was another blow to Toyota's President, Akio Toyoda, whose first full year on the job was consumed by recalls over problems related to unintended acceleration that totaled more than 10 million vehicles.

"Toyota's production will most certainly fall from last year's level, while both GM and Volkswagen will make big gains in the United States, Europe and China," said Koji Endo at Advanced Research Japan in Tokyo. The carmaker's global output may decline to less than 6.5 million vehicles this year from 8.4 million in 2010, he said.

The company's recovery may also be hindered by power shortages in Japan after the March 11 quake and tsunami forced the nation to close nuclear power plants.

The carmaker is working to restore full operations after the magnitude-9 quake and tsunami damaged parts factories and power plants, causing shortages of components and electricity.

Toyota's vehicle sales in Japan plunged 69 percent last month, leading the eighth straight drop in the nation's monthly auto deliveries because of parts shortages and the termination of a government subsidy program.

Toyota resumed output at all its Japanese plants at half of normal capacity on April 18. All of the company's factories were closed for two weeks following the quake.

Shares in the automaker rose 0.6 percent to 3,270 yen at the 3 pm close in Tokyo, before the earnings announcement. The stock has dropped 10.4 percent since March 10.

Bloomberg News