Rising energy costs and a doubling in raw material prices and logistics could force Toyota to cut its full-year profit by as much as 20%, the Japanese carmaker warned investors.
The company expect a drop in its operating profit to $19.7 billion for the current fiscal year, down from $22.9 billion in its last fiscal year that ended in March. It also forecast net income to fall by 20% to $18.5 billion.
“It is very unprecedented,” Toyota Chief Financial Officer Kenta Kon said about the raw material costs. The company forecast raw materials cost will more than double to $11.1 billion in its fiscal year that started in April.
The biggest automaker in the world expects to sell 8.85 million units globally this fiscal year, up 7.5% from last year. This goal, however, can be adjusted in the day to come.
Toyota just announced it will suspend operations at its factories in Japan due to the coronavirus lockdown in China, going from 750,000 vehicles planned globally this month, to 700,000.
“As a result of the lockdown in Shanghai, China, we have decided to additionally suspend operations of 14 lines at 8 plants in Japan from May 16 (Mon) to May 21 (Sat),” Toyota said in a statement.
Earlier this week EV giant Tesla also halted most production at its Shanghai plant citing problems with sourcing parts.