Toyota expects fall of 35% operating profit after earthquake image

Toyota, the world’s largest automaker has said on Friday that it expects a drop of 35 percent operating profit this business year that will be estimated at 300 billion yen ($3.7 billion). This fall is expected after the biggest earthquake in Japan that has delayed several projects and cut the sales.

The 9.0 magnitude earthquake has forced Toyota to cut its output in Japan and abroad. Toyota Motor Corp said on May 11 (when the earthquake has occurred) that this disaster has contributed to a fall of 52 percent in profit during January-March. However, the company postponed unveiling this year’s forecasts since it pondered the consumption and its supply chain with the collision of this disaster. 468.3 billion yen operating profit in this business year to March 2011 has been found which is based on the average of 23 forecasts done by the analysts comparing the annual guidance with a consensus of a 434b yen operating profit.

Since the disaster, 7.5 percent shares of Toyota have fallen. The company said on Friday that it is now expecting the dollar to average 82 yen in the current financial year to March 31, 2012. This is against the averaged currency rate of 86 yen each dollar in 2010.

This enormous interruption to production will possibly mean that the General Motors Co will snatch Toyota’s medal of being largest in the world and perhaps the Volkswagen AG will be ranked third on the list of global vehicle sales in 2011. As of 2011/12 business year, Toyota has cut its sales forecasts of group-based global vehicle from 7.3 million units to 7.24 million units. This figure comprises the sales at Hino Motors Ltd. (truck maker) and Daihatsu Motor Co. (compact car maker).

By Sunita Mandal