The American automakers weren't lying: the downturn in the economy and the credit crisis are hitting carmakers in a big way. Toyota, known historically for huge profit margins, has just announced that they will post their first ever operating loss since coming into existence over 70 years ago.
Though Toyota had been expected to post some gloomy figures, the latest from the Nagoya, Japan-based company was worse than most expected.
"We are facing an unprecedented emergency," President Katsuaki Watanabe told a year-end news conference today. "This is a crisis unlike the crises of the past."
Toyota cut its group operating forecast to a loss of nearly $2 billion Canadian dollars less than two months after an initial reduction in the forecast.
The news comes in line with announcements by rival automaker Honda that production would be slowed, and just days after the U.S. Government decided to approve billions in loans to help keep its domestic auto manufacturers afloat.
"This is very, very, very bad," said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments. "There's a chance they could fall into the red in the next business year as well." Toyota turned in a record profit of about 30 billion dollars last year, though they'll still be idling plants, delaying expansion projects and canceling executive bonuses this year.
Officials haven't created a forecast for next year, saying that under current circumstances, it would be impossible to make a prediction.
photo:Toyota
Though Toyota had been expected to post some gloomy figures, the latest from the Nagoya, Japan-based company was worse than most expected.
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| Toyota Motor Manufacturing, Texas |
"We are facing an unprecedented emergency," President Katsuaki Watanabe told a year-end news conference today. "This is a crisis unlike the crises of the past."
Toyota cut its group operating forecast to a loss of nearly $2 billion Canadian dollars less than two months after an initial reduction in the forecast.
The news comes in line with announcements by rival automaker Honda that production would be slowed, and just days after the U.S. Government decided to approve billions in loans to help keep its domestic auto manufacturers afloat.
"This is very, very, very bad," said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments. "There's a chance they could fall into the red in the next business year as well." Toyota turned in a record profit of about 30 billion dollars last year, though they'll still be idling plants, delaying expansion projects and canceling executive bonuses this year.
Officials haven't created a forecast for next year, saying that under current circumstances, it would be impossible to make a prediction.
photo:Toyota