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Toyota hurt by earthquake and strong yen

Toyota hurt by earthquake and strong yen
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Toyota says it suffered a steeper-than-expected fall in quarterly profits after output was hit by Japan’s biggest earthquake on record.

Its operating profit was down 52 percent and net profit – which includes earnings made in China – fell 77 percent.

The world’s biggest carmaker gave no forecasts for the current year due to the continued disruption to production but expects a recovery from June, which is earlier than it had expected as parts makers come back on line.

Toyota’s President Akio Toyoda also complained about the impact of the strong yen, which effects it more than other big Japanese carmakers because it makes 38 percent of its vehicles in Japan.

That has been viewed as the main factor slowing Toyota’s recovery down, with the dollar trading around 80 yen, compared with the 85 yen Toyota has said it needs to break even in Japan.

Toyoda acknowledged that the headwinds were greater now, with problems of power supply and the risk of aftershocks disrupting the supply chain again, but repeated he remained committed to Japan and protecting its jobs.

“The auto industry has a very broad reach, and we have the ability to drive Japan’s recovery during these very tough times,” he told a news conference.

The massive hit to production will almost certainly mean Toyota will fall behind General Motors and possibly Volkswagen to rank third in global vehicle sales this year.