Toyota keeps profit forecasts despite supply chain headwinds

TOKYO - Japan's Toyota left its annual forecasts unchanged despite ongoing disruption from the global chip shortage, as the cheaper yen offsets the impact of soaring materials prices.

The world's top-selling automaker, which reshuffled its executive line-up last month, is still suffering production setbacks caused by the semiconductor shortage along with other industry players.

"Dealers, suppliers and production sites worked hard under circumstances where production plans fluctuated greatly due to factors such as semiconductor shortages and natural disasters," Toyota said in a statement.

But it said it still expected net profit of 2.36 trillion yen ($18-billion) in the 12 months to March 2023, down 17 percent on-year.

Toyota said it was "striving to quickly evaluate alternative semiconductors and respond to design changes for securing stable procurement of semiconductors".

The company logged a third-quarter net profit of 727.9 billion yen, down eight percent on-year, and for April-December, net profit dropped 18 percent to 1.90 trillion yen.

While operating profit fell over the nine months, it was up in the third quarter "as the positive effects of a weaker yen and volume increases exceeded the negative effect of soaring materials prices", Toyota said.

The carmaker has struggled to meet its production targets simply because "there are not enough semiconductors", said Seiji Sugiura, senior analyst at Tokai Tokyo Research Institute.

But Toyota is in a better position than many of its smaller rivals as it "has strong bargaining power" with parts suppliers, Sugiura told AFP before the earnings release.

China's decision to end its zero-Covid policy and any economic stimulus measures from Beijing are also positive factors, he said, although Toyota cautioned that Chinese customers' enthusiasm remained lukewarm for now.