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Business

Reports say Toyota to suffer first-ever loss

Latest update : 2008-12-19

Hit hard by the global financial crisis and the strong yen, Japanese car maker Toyota is expected to announce its first-ever operating loss in the year to March 2009, according to news reports. The announcement is expected on Monday.

AFP - Japanese auto giant Toyota is likely to suffer its first-ever operating loss in the year to March 2009 due to a stronger yen and a global industry slump, news reports said Friday.

Toyota Motor Corp., which slashed its annual net profit forecast by more than half in November, is expected to downgrade its projections again at a year-end news conference on Monday, the Tokyo Shimbun said.

It would be Toyota's first operating loss since it began releasing earnings figures for the year to March 1941, the Nikkei business daily said.

A Toyota spokeswoman declined comment on the reports, which did not identify their sources or provide figures.

Toyota has for years enjoyed brisk sales and profits as strong interest in its fuel-efficient vehicles put it on course to overtake ailing General Motors as the world's top-selling automaker.

But the Japanese auto giant has since said it is reviewing its expansion plans as the global crisis takes a heavy toll on the industry.

GM and Chrysler -- two of Detroit's Big Three -- are on the verge of collapse, while Japan's second largest automaker Honda Motor Co. this week sharply revised its growth forecasts.

In November, Toyota revised its net profit forecast to 550 billion yen in the current year, down from the 1.25 trillion yen previously projected. That would mark a decline of 68 percent from the previous year.

Toyota also revised its operating profit forecast to 600 billion yen from its earlier estimate of 1,600 billion yen. Sales were newly projected at 25 trillion yen, down from 23 trillion yen forecast earlier.

But the news reports said Toyota would further downgrade its sales and earnings projections as the company was battered by a sharp decline in global auto sales and the yen's continued appreciation against the dollar.

Date created : 2008-12-19

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