Toyota has forecast its first operating loss in 71 years, citing falling demand and an appreciating yen as the key factors leading to its poor performance. Despite already cutting operating profit predictions by half last month to $6.6 billion, the carmaker now expects to post a ¥150 billion ($1.7 billion) loss in the year through March.
Currently, Toyota's profit for the period from April to September sits at $6.6 billion, however with massive losses expected for the 6-month period from October to March of next year this profit has a good chance of being significantly diminished or wiped out altogether. Global sales of Toyota vehicles for 2009 is expected to sit between 8 and 8.7 million units - almost 2 million units less than Toyota itself predicted recently.
“The environment we’re in is extremely tough,” President Katsuaki Watanabe told reporters today in Nagoya. “We’re facing an unprecedented emergency situation. Unfortunately, we can’t see the bottom.”
Toyota today also cut its global vehicle sales forecast 8.5% to 7.54 million for the year ending March 31. It also lowered its North America sales estimate by 10% to 2.17 million vehicles, reports Bloomberg.
In order to cut costs as much as possible, Toyota may have to delay launching new models, lashing research and development costs and extricating itself from non-essential activities, such as motorsports. Just last week we reported that Honda had cut its losses and left F1 in a bid to stay in the black this year.
Japanese rival Honda is also slashing costs as vehicle sales plummet, and the dire state of the world economy means that Detroit manufacturers are not the only ones feeling the pinch. In Europe, the story is different, with companies such as Porsche reporting record profits on the back of successful share trading of VW shares.
The last time Toyota posted an operating loss was in the year ended March 1938.
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