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• The carmaker expects materials costs to increase to 1.45 trillion yen in the current fiscal year
Toyota Motor Corp (NYSE: TM) said on Wednesday its full-year profit could be cut by as much as 20% amid high materials and logistics costs.
Toyota expects materials costs to increase to 1.45 trillion yen, or about $11.1 billion, in the current fiscal year.
The Japanese automaker said it plans to offset about 300 billion yen, about $2.3 billion of material costs by “cost reduction efforts.”
Automakers around the world have been facing challenges due to supply chain constrains and semiconductor shortages. With rising inflation and high costs, it is becoming increasingly difficult for the automakers to manufacture vehicles.
Toyota forecasts its operating profit to decline to 2.40 trillion yen, or $19.7 billion for the current fiscal year, compared to 3 trillion yen, or $22.9 billion, in its last fiscal year. Net income of the company is expected to fall by 20% to 2.26 billion yen, or $18.5 billion.
Adding to the supply chain issues, Covid-19 lockdowns in China had forced Toyota to suspend operations on 14 lines at eight domestic factories for up to six days in May.
Picture Credits: CNBC
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