The global supply chain crunch is having a significant impact on a whole range of industries, not excluding the car manufacturing sector, and now Toyota Motor Group warns its profits may be sliced

The world’s top car manufacturer says sales can no longer boost the impacts of the supply-chain crisis, recording a 33% reduction in fourth-quarter operating profits.

Shares in the company dropped more than 5% on Wednesday, before closing down 4 per cent – which is the biggest one-day fall in two months.

This all comes despite Toyota performing fairly well throughout the global semiconductor chip shortage due to a large stockpile of the chips.

But as the supply chain crunch only worsens, executives have made the call to slash production.

Toyota’s manufacturing costs for the Corolla will more than double to over 11.1 billion dollars in the fiscal year from April, forcing the company to opt for lower-cost materials.

The managing director says rising prices means Toyota will “work to reduce the amount of materials used as much as possible and replace them” with less expensive versions.