Iran war costs Toyota £3bn as prices of materials soar and sales fall

Toyota has reported a £3bn hit from costs from the war in Iran, as prices of parts and materials soared and sales dropped. The world’s biggest carmaker said profits declined in its financial year to March as it was “likely unable to absorb newly added impact from the Middle East”, in one of the largest warnings yet of the war’s impact on businesses. The biggest hit for the Japanese manufacturer was a 400bn yen (£1.9bn) increase in materials costs linked to the war, while it lost another 270bn yen in lower sales. Toyota is the dominant automotive brand in the Middle East. Toyota’s operating profits dropped to 3.8tn yen for the year to March, with Donald Trump’s tariffs costing it 1.38tn yen. The US-Israeli attacks on Iran, and the consequent closure of the strait of Hormuz, have roiled global industry. Trump, under political pressure because of higher gasoline prices in the US, has said a deal to reopen the strait is on the table, but Iranian officials have so far given no indication that they are minded to accept. Asian manufacturers have been particularly affected by the turmoil because of a heavier reliance on exports from the Gulf , many of which have been trapped since the start of the war. For instance, Japan’s automotive industry lobby group has said 70% of the country’s aluminium imports come from the Middle East. Oil prices have also increased the cost of tyres. …