Toyota sees first annual net loss since 1950
Last updated 2-12-09 at 9:44 a.m.
By Yuri Kageyama
The Associated Press
TOKYO (AP) — Toyota forecast its first annual net loss since 1950 on Feb. 6 as plunging demand for cars, especially in the U.S., and the strong yen pummeled earnings at the world’s No. 1 automaker.
Toyota Motor Corp. reported a 164.7 billion yen ($1.8 billion) loss for the October–December quarter, down sharply from the 458.6 billion yen profit for the same period the previous year.
In December, Toyota, maker of the Prius hybrid and Camry sedan, thought it would eke out a small annual net profit, but the outlook has darkened since then, particularly as the U.S. auto market has collapsed.
“Toyota is having serious problems responding,” said Yasuaki Iwamoto, analyst with Okasan Securities Co. in Tokyo. “It boasts a full and global lineup of products. But the world’s auto demand changed in a flash.”
Since the company can’t count on global sales picking up next fiscal year, at best it can aim to cut costs to minimize the damage, Iwamoto said.
The last time Toyota had the equivalent of a net loss was in 1950, when it reported just parent results under different accounting standards than it uses now. It has not had a quarterly net loss since it began reporting quarterly numbers in 2002.
Toyota, which last year overtook General Motors Corp. to become the world’s best-selling auto company, is shutting down production at its 11 plants in Japan for 14 days during the first three months of this year, and further such suspensions may be needed.
Executive Vice President Mitsuo Kinoshita promised that Toyota will turn itself around through cost cuts and new products. He said Toyota continues to be committed to developing gas–electric hybrids as a pillar of its growth strategy.
Honda Motor Co., Japan’s second-biggest automaker, expects to stay in the black for the year through March with an 80 billion yen profit, although that’s down 87 percent from a record 600 billion yen the previous year.
Nissan Motor Co., the nation’s No. 3 automaker, reports earnings. Smaller automakers Mitsubishi Motors Corp. and Mazda Motor Corp. have already projected losses for the fiscal year. (end)