Toyota sees 1st full-year loss

Toyota sees 1st full-year loss
Japanese automakers also suffer in U.S. market

BY YURI KAGEYAMA • ASSOCIATED PRESS • December 20, 2008


TOKYO -- Toyota's mainstay vehicle operations are likely to post their first-ever loss for the fiscal year through March 2009, Japanese media reports said Friday, highlighting the dire conditions faced by global automakers.
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The Nikkei, Japan's top business daily, said Toyota's standalone operating result will be a loss for the fiscal year ending March 31. It did not cite sources. Kyodo News had a similar report.

The reports said that the Toyota group of companies -- including Daihatsu Motor Co., which makes small cars, and truckmaker Hino Motors -- will manage to post a profit for the fiscal year through March.

Toyota declined comment on the reports.

Toyota Motor Corp., which makes the popular Camry sedan and Prius gas-electric hybrid, has never reported a full fiscal-year loss since it began disclosing operating profit in 1941.

But Japanese automakers -- which had until recently avoided the serious problems of their U.S. rivals -- are getting hammered by plunging auto sales in the key U.S. market and elsewhere.

The surging yen, which erodes overseas earnings, have also battered their bottom line. The dollar has fallen to 13-year lows below 90 yen.

Analysts say calculations show that a loss for Toyota alone may be inevitable, given the strong yen and plunging auto sales.

"It looks as though Toyota will fall into red ink for the full year," said Mamoru Katou, auto analyst at Tokai Tokyo Research. "Things have clearly gotten worse since the earlier outlook of breaking even."

He noted even Honda Motor Co., which has fewer models, is suffering, and damage to Toyota's bottom line was unavoidable.

Toyota President Katsuaki Watanabe is scheduled to hold a news conference Monday. Usually, the president announces ambitious sales and production goals for the coming year in the annual event.

Grabbing attention in recent years was whether Toyota would dethrone Detroit-based General Motors Corp. as the world's No. 1 in annual vehicle sales.

But Toyota said Friday it was still undecided whether it will announce such targets this year.

In his annual year-end news conference, Honda President Takeo Fukui said Honda's worldwide vehicle sales in 2008 are expected to reach 3.77 million units, unchanged from 2007. He did not give a vehicle sales target for 2009 -- an unusual move for Honda.

Toyota's U.S. sales plunged by a third for the year in November, when overall sales fell to their lowest level in more than 26 years.

There is little hope for recovery in the next few months as consumers hold back on big purchases.

Toyota is forecasting a 550-billion yen ($6.2-billion) profit, less than a third of what it racked up the previous fiscal year, on 23 trillion yen ($258.4 billion) sales, down 12.5% percent on the year.