As anticipated late last week, Toyota on Monday forecast an operating loss of $1.66 billion for the fiscal year ending March 2009. The announcement was made by the automaker’s president, Katsuaki Watanabe, at the company’s annual year-end press conference in Nagoya, Japan. The loss would be the automaker’s first since it began reporting results in 1941.
It goes without saying that Toyota blamed the sluggish credit market for its slow sales across the globe.
“The change that has hit the world economy is of a critical scale that comes once in a hundred years,” Watanabe said. He called the drop in sales over the last month “far faster, wider and deeper than expected.”
Watanabe indicated that Toyota’s net profit expectation would drop from 1.7 trillion yen – about $19 billion – to just $558 million.
Last fiscal year, Toyota posted an operating profit of about $25 billion. This is the second time that Toyota has dropped its earnings forecast this year.
Tsuyoshi Mochimaru, auto analyst for Barclays Capital in Tokyo, told the Associated Press that Toyota will continue to struggle into the near future.
“The problem is next year,” he said, while adding that the latest revisions were within expectations. “It’s unmistakable that things are extremely tough for Toyota.”
Watanabe said that Toyota plans to stay lean as its sales drop in order to maintain profitability, though he said at the press conference that the automaker’s bottom line for sales is 7 million units worldwide. In 2007, Toyota sold 9.37 million vehicles and it will announce global 2008 sales results shortly after the new year begins.
