Toyota reported a sharp 18.5% downturn in its latest quarterly earnings, largely the result of parts and product shortages caused by the earthquake and tsunami that struck northeastern Japan last March. But the maker warned it is facing new challenges ahead. On an operating basis, the maker said it lost $418 million for the first half of its fiscal year, compared with a $4.1 billion profit a year ago.
In a presentation from Tokyo, Toyota officials withdrew their earlier guidance for the rest of the fiscal year – which ends on March 31, 2012 – due to the potential havoc the company faces in the wake of the flooding that struck Thailand last month. That has disrupted supplies of both vehicles and parts, resulting in new production cuts at Toyota plants around the world.
Further complicating matters, the yen continues to gain strength against the dollar and other major currencies. The current exchange rates are “far beyond what is tolerable,” Toyota CEO Akio Toyoda said earlier in the week, warning that if the trend isn’t reversed Japan’s manufacturing base could be “destroyed.”