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Toyota has explained the reason for the decline in its estimated profits, the new American tariffs, the cost of rising raw materials, the strong yen, the growing labor cost and investment for future expansion.
Highlights
- Toyota estimated a 21% decline in profits.
- Profit decreased due to increase in the cost of American tariffs and raw materials.
- Toyota focused on future expansion and high labor costs.
New Delhi. Toyota Motor is getting ready to impact US President Donald Trump’s tariff policy as it has estimated a huge decline in 21% profit in the current financial year. According to Reuters, in the last financial year, Toyota recorded a profit of 4.8 trillion yen (about $ 33 billion). However, the Japanese automaker has estimated a low profit of 3.8 trillion yen ($ 26 billion) for this year.
Yoichi Miyajaki, Executive Vice President (Chief Financial Officer) said on the income call, “Despite making widespread investments for the future and strengthening our foundation, efforts such as price modification and the expansion of price chain income enabled us to maintain high levels of profits.”
Toyota is expecting the American tariff to be affected, which may be forced to increase the price of its cars, which will have a negative impact on buyers. Tariffs can also affect Japanese company exports. Toyota’s president Koji Sato said, “Tariff details are still unstable, so it is very difficult to predict.”
The reason why Toyota estimated less profit for the new financial year explained the reason. Starting from the new American tariff, the cost of raw materials and the strength of the yen. The company has also paid attention to future expansion plans and high labor costs in the US, which every manufacturer is facing.
Toyota is trying to have a positive attitude as Miyajaki said that the Japanese company has no immediate plan to put a huge duty on customers. “We believe that prices should be determined by customers… and we have raised the prices of high -demand goods,” he said, “We will give proper feedback at the right time.”
