Toyota Motor Corporation has revealed the direct global impact of the current situation in the Middle East on the automotive sector. The company projects that this crisis will cause operational losses estimated at approximately $4.3 billion (equivalent to 3.05 billion Jordanian Dinars) during the current fiscal year.

This announcement coincides with the company's disclosure of a 50% drop in quarterly profits for the first quarter of this year, alongside expectations of a 20% decline in annual profits for the new fiscal year ending in March 2027.

Causes of Losses and Impact on Production Lines

Official indicators released by the company show that the current pressures are driven by several key factors:

• Production Line Halts: Toyota recently suspended 5 major production lines across four Japanese factories during March and April. The closures affected the most in-demand models in both local and regional markets, such as the Land Cruiser and Camry, due to shipping disruptions.
• Rising Operating Costs: The bulk of the losses is attributed to a sharp increase in raw material prices, energy costs, and ocean and land freight rates across vital waterways.
• Delayed Deliveries: The remaining impact is linked to lower sales volumes in certain markets due to delays in shipments reaching regional dealers.

Official Statement: Takanori Azuma, the company's Chief Financial Officer, stated that the impact of the crisis has extended to every stage of the manufacturing process, from shipping fuel costs to the prices of paint and essential materials used within assembly plants.

Record Sales for Hybrid Vehicles

Despite major challenges in production costs, Toyota is experiencing a positive paradox in its sales figures:

• The company expects its hybrid vehicle sales to surpass the 5 million mark for the first time in its history this year.
• This growth is driven by consumers shifting toward more fuel-efficient vehicles to cope with the continuous rise in energy prices globally and locally.

However, the company emphasized that this strong demand remains insufficient to offset the sharp rise in operational and logistical costs for shipping and production.

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