Toyota Motor Corporation’s first-quarter profits have plummeted due to frequent production cuts. The company has released its first-quarter financial results, which show a 42 percent drop in profits.
Operating profits at the company have fallen to $4.3 billion from $7.47 billion at the same time last year. The company cited repeated production cuts as a result of the global supply-chain crisis, chip shortages, and other operational issues.
Regardless, the automaker met its production target of 9.7 million units this year. The company attributed the production forecast fulfillment to its strong residual demand.
Toyota’s spokesperson corroborated that the supply challenges have stalled global sales. “We were not able to produce enough, with customers globally waiting for their vehicles to be delivered,” the spokesperson said.
According to the company, rising global inflation may dampen vehicle demand. It stated that material costs are expected to rise by 17% in the coming days.
Pakistan faces a similar issue
Toyota Indus Motor Company (IMC), like the entire automobile industry, is struggling as a result of Pakistan’s current economic situation.
Last month, the company told a media outlet that it intends to halt production and assembly operations from August 1-14, 2022, due to the State Bank of Pakistan (SBP) refusal to approve Letters of Credit (LC).
It also stated that the production cut is the result of currency depreciation, tax rate increases, increased shipping costs, and raw material costs. The automaker also stated that it will provide full refunds to waiting customers with a 100 percent markup.
Ali Asghar Jamali, CEO of Toyota IMC, stated: – “We will give customers the option to avail a refund with the full interest. In case they choose not to opt for this (refund), they will have to wait at least 3 (more) months from the delivery month given on the Provisional Booking Order Form and (also) pay the price differential due to the exchange rate situation.”
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