Toyota forecasts $1.6 billion loss for this fiscal year

  Japanese auto giant Toyota said Monday that it would suffer an operating loss due to plummeting auto sales and a strong local currency.

About 30 minutes after the market closed in Tokyo, Toyota said it expected to lose approximately $1.5 billion to $1.7 billion this fiscal year. Toyota reports earnings on a fiscal calendar beginning in April.

This would be Toyota’s first operating loss since 1950, Toyota spokesman Steve Curtis said.

Despite the likely operating loss, Toyota expects to post a $557 million net profit for the fiscal year. The profit stems, in large part, from joint ventures whose revenues are not included in the automakers’ accounting for its operating profits.

Toyota’s joint ventures include a facility in Japan, operated in co-operation with Panasonic, that produces batteries for hybrid vehicles and a factory in California, operated jointly with General Motors, that builds the Toyota Corolla sedan and the Pontiac Vibe small wagon.

Falling car sales in the United States and abroad have been taking a major toll on automakers.

Toyota will sell about 1.4 million fewer vehicles globally this fiscal year — about 7.5 million vehicles in all — than it did last year. The company’s North American sales will be particularly hard-hit, dropping by 250,000 units, according to the automaker.

Toyota reports results based on a fiscal year calendar beginning in April.

Toyota (TM) said Monday that it expected worldwide auto sales in calendar year 2008 to decline 4%.

Japanese exports have suffered because of currency exchange rates. The rising value of the yen sent Japan’s trade deficit shooting up to $2.5 billion in November, according to the Japanese government. Exports fell 27% on a month-over-month basis.

Toyota expects losses of about $2.2 billion due to currency exchange rates alone.

Toyota’s main Japanese rival, Honda (HMC), reduced 2009 earnings estimates and cut its forecast for 2008 last week, saying there was “no prospect for recovery” as auto sales and the economy continue to deteriorate.

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One Response to “Toyota forecasts $1.6 billion loss for this fiscal year”

  1. sherry Says:

    Of the money we have seen thrown around thus far let me ask you this, that 168 billion that our country borrowed to give away to us in the form of an “economic stimulus package” …did it do a darn thing to create jobs or stimulate our economy? NO, nothing. And we borrowed the money from China.

    This past year the high cost of gas nearly destroyed our economy and society. More people lost jobs and homes as a direct result of that than any other factor in our history.

    Fannie and Freddie continue to get all the blame. Of all the homes I have seen lost in my area SW FL and believe me I have seen many, none were due to an adjustable mortgage. They were due to lack of work.

    Families went broke at the pump alone. Then added to that most saw record rate hikes at their utility companies. The high cost of fuel resulted in higher production and shipping costs that were passed on to the consumer, in most cases higher prices for smaller packaging.

    Consumers tightened their belts, cut back, went out to eat less or stopped totally. Drove around on tires that needed replacing longer, some even quit buying medicines they really need.Unfortunately cutting back and spending less results in even more layoffs. A real economical catch-22.

    And, as we are doing the happy dance around the lower prices at the pumps OPEC is planning to cut production to raise prices. They are even getting Russia in on the cutbacks. Oil is finite. We have used up the easy to get to reserves already. It will run out one day.

    We have so much available to us. Solar and Wind are free sources of energy. Of course to get the harnessing process set up is somewhat costly it is still free energy.

    It would cost the equivalent of 60 cents per gallon to charge and drive an electric car. The electricity to charge the car could be generated by solar or wind at least in part and in most cases totally.

    If all gasoline cars, trucks, and suv’s instead had plug-in electric drive trains, the amount of electricity needed to replace gasoline is about equal to the estimated wind energy potential of the state of North Dakota. What a powerful resources we have neglected.

    Jeff Wilson has a profound new book out called The Manhattan Project of 2009 Energy Independence Now. http://www.themanhattanprojectof2009.com Powerful, powerful book! Also, if you think electric cars are way out there in some futuristic lala land please check out the web site for a company Better Place. http://www.betterplace.com/ they are setting up infrastructures in San Francisco, San Jose and Oakland as well as the state of Hawaii to accommodate electric car use.

    I think we need to rethink all these bailouts and stimulus packages. We need to use some of these billions to bail America out of it’s dependence on foreign oil. Create clean cheap energy, create millions of badly needed new green collar jobs and get out from under the grip foreign oil has on us. What a win -win situation that would be for America at large

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