Higher used car prices, depreciation of the yen and lower incentive costs helped Toyota Motor Corp raised its profit outlook for the fiscal year ending March 31, 2022.
But the company’s chief financial officer also cautioned the continuing semiconductor shortage is expected to trim the company’s production plans by roughly 300,000 units. The disruption of the supply of semiconductors has hurt companies around the world.
Toyota said in a statement it has employed various strategies to maneuver around the shortages. For example, it has launched what it described as special editions of vehicles in China, which can be built with fewer computer chips. In North America, dealers have placed customers’ orders for specific vehicles while they are in transit.
Rough road ahead
“Stabilization of supply is unpredictable and does not allow from optimism,” Toyota noted in its summary of the financial results for the first half of the current fiscal year.
“Even if we operate our plants at full capacity from December it will be tough to meet the production target, but we will try to achieve that,” Toyota CFO Kenta Kon told a news briefing.
“Although sales and production volume have been revised downward, the forecast for operating income has been revised upward based on a weaker yen,” the company noted in its financial release.
Weaker yen helps in a way
But Kon said without the impact of a weaker yen which inflates the value of profits earned abroad, it was “in substance a downward revision” due to higher materials costs, according to Reuters.
Toyota officials said while production was recovering, the company was planning to build more vehicles to meet the strong demand for its models, including sport-utility vehicles and other offerings with solid profit margins.
Officials also noted fixed costs have risen due to increasing material costs.
Toyota expects a profit of 2.49 trillion yen $22 billion for the fiscal year through March 2022, up 11% from 2.2 trillion yen the previous year. The profit has prompted Toyota to raise its half-year dividend by 15 yen or about 15% and to order a repurchase of the equivalent of $15 billion worth of its outstanding share.
