Toyota profit falls 42 per cent amid rising costs and supply constraints

Toyota Motor Corporation is feeling the effects of rising costs and supply constraints, with profit falling by a worse-than-expected 42 per cent reports Reuters.

The Japanese car giant has seen its operating profit for three months between April and June 30, 2022 drop to $NZ6.91 billion from $NZ11.9 billion for the same period last year.

A combination of the global chip shortage and the ongoing COVID-19 pandemic have seen Toyota cut output goals for its plants across the globe.

Investors were caught by surprise when they saw the figure considering an analyst had only estimated a 15 per cent drop. Shares slid by three per cent.

Toyota said rising material costs have cost the company $NZ3.8 billion.

Despite this, Toyota is sticking to its full-year operating profit forecast and still plans to produce 9.7 million vehicles this fiscal year.

Production is also expected to pick up in the second half of the financial year due to an easing global chip shortage.