The domestic automakers have been hit hardest by the recent economic downturn and ever-tightening credit market, but even the Japanese automakers are starting to see a major impact on their bottom lines. Toyota ’s sales are way down, which may force Toyota President Katsuaki Watanabe to make some drastic changes.
Just a few months ago, Toyota predicted an unprecedented 29.5 percent drop in operating profit to $15.5 billion for the fiscal year that ends March 2009. However, things have worsened over the last three months, prompting Toyota to revise its profit forecast to just $5.83 billion, a reduction of 73.6 percent.
North America is leading the sales slums – down more than 9 percent this year – but Toyota has also had to reduce its global sales forecast.
“This is an unprecedented situation,” Toyota Executive Vice President Mitsuo Kinoshita told Automotive News. “Every week, the environment gets worse.”
Watanabe heads up a committee charged with keeping Toyota’s profits in the black through 2009 and 2010, which means tough decisions could lie ahead. The combination of falling sales and the rising value of the yen could mean job cuts or even cancellation of entire projects currently in the pipeline. No details have been given on any planned cuts, but with Toyota not expecting a recovery until early 2010, we’re sure some cuts will be announced soon.
