Toyota Motor Corp. (TM) revealed that the earthquake and tsunami in Japan on March 11 that killed more than 10,000 people, broke down infrastructure and triggered a nuclear crisis will hurt its earnings in the financial year that just started.
The catastrophe in Japan damaged many parts supplying companies’ plants that manufacture key components for cars and trucks in the U.S. and other countries. As a result, Toyota remained uncertain about resuming its production.
Production resumed at only two of the 18 plants in Japan that build Toyota and Lexus cars. Those plants are assembling a limited number of three hybrid models at a reduced rate.
The automaker also declared that it hiked retail prices in the range of 1.2%–2.2% for most Toyota, Scion and Lexus models of 2011 model year. However, Toyota did not alter the retail prices of Toyota Tacoma compact pickup truck, Yaris sedan, Scion tC sports coupe, Scion xB urban utility vehicle, Lexus CT 200h hybrid premium compact of 2011 model year and the LFA supercar of 2012 model year.
The price increase for the models manufactured in North America will take effect on vehicles produced beginning in May. However, the same for vehicles (such as the 4Runner, Corolla, FJ Cruiser and Prius) built in Japan will take effect with scheduled May arrivals.
A couple of days back, Toyota asked its U.S. dealers to restrict orders for replacement parts from Japan. The automaker said it could not take orders for 233 parts for Lexus, Scion and Toyota models unless they are specifically required by a customer for repair.
Almost all the Japanese automakers, including Honda Motor Co. (HMC) and Nissan Motor Co. (NSANY.PK), are plagued by the natural disaster in the country. They have suspended and cut down their production in the wake of plant outages and parts supply shortage.
Toyota posted a 39% fall in profit to yen 93.63 billion ($1.14 billion) or yen 29.86 (36 cents) per share in the third quarter of fiscal 2011, from yen 153.22 billion ($1.86 billion) or yen 48.86 (59 cents) per share in the year-ago quarter. The fall in profit was attributable to lower sales in the Japan, North America and Europe as well as a stronger yen.
Consolidated revenues in the quarter dipped 12% to yen 4.67 trillion ($56.74 billion) on the back of a 13% fall in global sales volume to 1.8 million units. Vehicle sales declined 21% to 507,861 units in North America, 31% to 402,476 units in Japan and 5% to 207,621 units in Europe. Meanwhile, sales rose 21% to 334,504 units in Asia and 2% to 349,219 units in Other regions.