Toyota said it expects operating profit this business year to fall 35 per cent to 300 billion yen ($3.7 billion) after Japan's biggest earthquake on record severely disrupted car production and slashed sales.

Operating profit in the year to March 2011 was 468.3 billion yen.

The 9.0 magnitude earthquake that rocked northeastern Japan on March 11 forced Toyota and other Japanese
automakers to cut output at home and abroad as they struggled to secure vital parts. The ensuing nuclear disaster and power shortages have compounded problems.

The world's biggest automaker said on May 11th that the earthquake has contributed to a 52 per cent fall in profit during the January-March quarter, but the company delayed unveiling the annual forecasts as it weighed the impact of thedisaster on consumption and its supply chain.

The massive disruption to production, will likely mean Toyota will fall behind General Motors and possibly
Volkswagen to rank third in global vehicle sales this year.

Toyota cut its group-based global vehicle sales forecast for the 2011/12 business year to 7.24 million units from 7.3 million. The figures include sales at truck maker Hino Motors and compact car maker Daihatsu.

Toyota said today it now expects the dollar to average 82 yen in the current financial year to next March 31st, against an averaged currency rate of a 86 yen-per-dollar last year.

Toyota's shares have fallen 7.5 per cent since the disaster, underperforming the benchmark Nikkei 225 average which lost 6.5 per cent. Its shares on Friday rose 0.9 per cent to close at 3,300 before the company released the profit forecast.

Reuters