Toyota profit down as chips shortage keeps customers waiting

TOKYO » Toyota’s profit fell nearly 18% in the April-June quarter from the year before, as a semiconductor shortage that has slammed the auto industry dented production at Japan’s top automaker.

Toyota Motor Corp. reported Thursday a quarterly profit of $5.5 billion, down from $6.7 billion the previous year.

Quarterly sales rose 7% to 8.49 $63 billion.

Toyota officials apologized to customers who have been waiting for their cars after putting in orders. Some have waited so long the vehicle went through a model change in the meantime.

Various problems apart from the chips shortage have hurt production, such as flooding in South Africa and pandemic lockdowns in Shanghai, according to the manufacturer based in Toyota City, central Japan.

Electric vehicles, which need many chips, have been the worst hit by the global chips crunch. Rising material costs also hurt Toyota’s bottom line.

The negatives offset the perks of a weaker Japanese yen. A cheap yen benefits Japanese exporters like Toyota by boosting the value of their overseas earnings when they are converted into yen.

The favorable foreign exchange rate increased Toyota’s operating income for the quarter by $1.5 billion, the company said.

Toyota sold about 2 million vehicles during the quarter, down from 2.1 million vehicles in the same period last year.

But it kept unchanged its full fiscal year forecast to produce 9.7 million vehicles, saying output will pick up in the months ahead.

Toyota posted record earnings in the last fiscal year through March, racking up a $21 billion profit, up nearly 27% on year.

For the fiscal year through March 2023, it’s forecasting a profit of $17.6 billion. The projection was revised upward from an earlier estimate of $16.9 billion.

Toyota, which makes the Prius hybrid, Lexus luxury models and Camry sedan, has been boosting electric vehicle sales as the world’s interest in sustainability grows. At times it has been accused of lagging in electric vehicles, partly because it’s done well with hybrid vehicles, like the Prius, which includes a gasoline engine and an electric motor.

The company expects to sell 10.7 million vehicles worldwide in the fiscal year through March 2023, up from nearly 10.4 million vehicles in the previous fiscal year.