Toyota suffered a 42 per cent drop in operating profit during its first quarter as increasing costs and supply pressures took their toll.
It reported making 578.66bn yen (£3.55bn) versus 997.4bn yen (£6.12bn) over the same April-June period in 2021.
Covid curbs on Chinese factories plus the worldwide semiconductor shortage have led to it repeatedly cutting monthly output goals, said Reuters.
The size of the drop was much worse than the 15 per cent that analysts had been predicting.
Mitsubishi UFJ Morgan Stanley Securities analyst Koichi Sugimoto was quoted as saying: ‘It’s extremely bad.’
According to Toyota, the increase in prices of materials had cost it 315bn yen (£1.93bn).
However, it still aims to make 9.7m vehicles during the financial year, thanks to strong residual demand.
A Toyota spokesperson was quoted as saying: ‘We were not able to produce enough, with customers globally waiting for their vehicles to be delivered.’
They added that it would be able to obtain the semiconductors that were needed and that staff shortages at some domestic factories caused by Covid outbreaks were expected to be resolved, with production picking up towards the year’s second half.