Toyota Motor Corporation, the world’s biggest automaker, said earnings may be reduced by output disruptions following Japan’s earthquake and tsunami last month, which contributed to a record decline in the nation’s auto sales.“There’s no doubt financial results will be influenced by the earthquake,” President Akio Toyoda told reporters yesterday at the company headquarters in Toyota City, Japan, without elaborating. “Ports, industrial complexes and roads are destroyed.”
Carmakers including Toyota, Honda Motor Co and Nissan Motor Co halted output after the March 11 disaster damaged factories and knocked out power plants, causing shortages of parts and electricity.
Even before the earthquake, Japanese auto sales were set to fall for a seventh month after the government phased out subsidies for fuel-efficient models in September.
The earthquake may cut Toyota’s operating profit in the fiscal year which started yesterday by as much as 200bn yen ($2.4bn), said Koji Endo, an analyst at Advanced Research Japan in Tokyo. The carmaker has said it lost production of 140,000 units last month due to shortages of electronic parts, rubber and plastics.
“Toyota has more production and affiliates than anyone else in the industry,” said Satoru Takada, an analyst at TIW Inc in Tokyo. “It will probably take time for Toyota to have a good grasp of how big the damage may be.”
Japan’s industrywide auto sales, excluding minicars, plunged 37% last month to 279,389 vehicles, the largest drop for the month since recordkeeping began in 1968, the Japan Automobile Dealers Association said in Tokyo yesterday.
Toyota’s sales, excluding Lexus-brand cars, fell 46%.
“Consumer confidence is falling all across Japan, not only in the areas hit by the quake,” Takada said. “Sales were on a downward trend to begin with.” The magnitude-9 temblor off the coast of northeast Japan and the subsequent tsunami left more than 28,000 people dead or missing and destroyed 21mn kilowatts of electrical generating capacity. The nation’s automakers are considering co-operating to save energy through measures such as adjusting production schedules, Toyoda said.
“I would like Toyota to take leadership and help support the nation as much as possible,” Toyoda said.
Toyota’s operating profit may be cut by at least 100bn yen in the fiscal year ended March 31, Endo said.