The military conflict between Israel, the US and Iran has shaken not only the global energy markets, but also sent serious tremors through the floors of the automotive industry. The first major victim among the automotive giants is already clear - Japanese leader Toyota is forced to quickly adjust its production conveyors due to the geopolitical fire in the Middle East.
The Japanese manufacturer has already sent official letters to its network of suppliers, informing them of a reduction in global production by nearly 83,000 vehicles in the period until November, our colleagues at Carscoops are alarmed. The brand's absolute bestseller - the RAV4 crossover - is the most affected by the crisis. The main reason for the rescue plan is logical: skyrocketing fuel prices around the world and a sharp cooling of consumer interest in the Middle Eastern markets.
In addition to the popular SUV, the restrictions will also affect models based on the company's innovative international multi-purpose platform. Among them are proven fighters such as the Hilux pickup truck, the Fortuner SUV, and the long-awaited new Land Cruiser FJ. Along with them, fewer units will also roll off the assembly lines for the practical Probox and Corolla Touring station wagons.
In fact, Toyota began tightening its belts back in the spring, when it quietly cut its export quota for the troubled region by 40,000 cars. The situation is so tense that it has led to temporary work stops at key Japanese facilities – the Tsutsumi plant (Aichi Prefecture) closed one of its lines for two days, and the Gifu body factory suspended operations for 24 hours. Considering that the brand traditionally exports between 500,000 and 600,000 vehicles a year to the Middle East, the current disruption to logistics chains will affect nearly half of that volume.
Despite the dark clouds, the overall picture does not look entirely catastrophic. By the end of the current fiscal year, Toyota plans to pass the 10 million mark produced with the Toyota and Lexus emblems, which is a symbolic growth of 1% year-on-year. The big problem, however, remains the financial impact of the crisis. Forecasts point to a serious collapse in consolidated net profit by as much as 22%, dropping it to 3 trillion yen (about $18.89 billion). If the weapons in the Middle East don't die down soon, the Japanese financial statements are likely to get even darker.