Toyota Motor said Friday that it expected its annual net profit to fall by almost a third from a year earlier, hurt by production disruptions in the aftermath of the massive earthquake and tsunami that struck Japan in March.
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But Toyota’s forecast also projected a robust recovery in the coming months as the automaker makes headway in mending its supply chain. Though Toyota’s 17 plants in Japan escaped the disaster relatively unscathed, factory lines have been working well below capacity, as vital suppliers in the country’s worst-hit areas race to restart operations.
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Also weighing on production at Toyota is an electricity shortage in Japan following the accident at the Fukushima Daiichi nuclear plant. Many other nuclear power plants are being kept closed as Japan rethinks its nuclear policy, leading to concerns of a power crunch this summer, when energy use peaks. ...
Japanese automakers, together with other manufacturers, are being asked to reduce their electricity use by 15 percent this summer.
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The higher costs of producing cars in Japan has raised the question of how long Toyota can continue to base so much of its production in its home country. Even compared to its peers, Toyota stands out in the number of cars it still manufactures in Japan, then ships overseas — a setup that become a drag on its profitability.