The world’s top car manufacturer missed the target?

According to the online economy report, quoted by Isna, the lack of chips and supply chain problems have forced the world’s top car maker to repeatedly reduce production targets. The Japanese carmaker cut its monthly production targets three times in the April-June first quarter, falling 10 percent short of its original targets due to a shortage of semiconductors and the impact of Covid-19 restrictions in China.

Toyota, like other manufacturers, is grappling with higher costs and worries that global inflation could dampen consumer demand. Last year’s first-quarter profit rose as Japan’s biggest automaker weathered the worst of the pandemic, but this year’s only positive in the first quarter is a likely weaker yen, said Koji Endo, auto analyst at SBI Securities.

Endo said: The first quarter of last year was the period of complete cost reduction. Compared to that, this time the profit is probably greatly reduced. Operating profit fell to 578.66 billion yen ($4.3 billion) for the three months ended June 30, well below the average profit of 845.8 billion yen estimated by 10 analysts, the data showed. In the same period last year, Toyota reported a profit of ¥997.4 billion. Despite the quarterly decline, the automaker stuck to its forecast for annual operating income of ¥2.4 trillion in the 12 months to March 31, 2023.

The yen fell by about 10 percent during the April-June quarter. A weak yen is usually a boon for companies that export, as it boosts earnings when overseas earnings are repatriated. However, some of the gains have been offset in recent years as Japanese companies produce more overseas, meaning their overseas costs also rise as the yen weakens.

Toyota and its main Japanese rivals Nissan Motor and Honda Motor are also grappling with long-term challenges, including the electrification and automation of vehicles. A key question for analysts and investors is whether Toyota can maintain its global production target of 9.7 million vehicles for the current fiscal year ending in March, which is likely to depend on the outlook for chip shortages, the supply chain as well as the economic outlook.

Even if the economy slows, Toyota has a huge order backlog, and declining demand for consumer electronics could push chips into auto production, Endo said. If Toyota doesn’t change the full-year production target in the second quarter, it means it is very confident about production in the second half of the year to hit the target, he said.