Toyota Cuts Production Estimates in 2022 amid Surging Costs and Chip Shortage

Toyota Motor Corp reported a 25% drop in quarterly profit, which was worse than expected as the Japanese firm battled surging material costs and persistent semiconductor shortages.

The world’s biggest automaker by sales also warned the future is difficult to predict after the fourth consecutive quarterly decline in profit.

The company stated that due to the coronavirus pandemic, there is a continuing chip shortage this year and the company is cutting monthly production targets repeatedly, but the company manages supply chains better than other car makers.

In the three months ended in September, operating profit fell to 562.7 billion yen. According to a Refinitiv poll of 12 analysts, the figure came out shorter than the average estimate of 772.2 billion yen. The sales profit of the company was 749.9 billion yen in the previous year and 578.6 billion yen in the first quarter.

The company said it now expects to produce about 9.2 million vehicles this fiscal year, down from the 9.7 million previously forecast, but still well above last year’s production of 8.6 million units.