Toyota - first annual loss in 71 years

[bwling]

http://www.autoblog.com/2008/12/19/toyota-poised-for-first-annual-loss-in-71-years/



Toyota poised for first annual loss in 71 years

During the debates leading up to the Detroit automaker bailout, politicians and pundits kept pointing to Toyota and asking "Why can't you be more like them?" Well, they are... sorta. It's looking increasingly likely that Toyota will post an operating loss for the 2008 fiscal year that ends March 31, 2009. The last time Toyota lost money over an entire year was its first 365 days of operation back in 1937/38.

Toyota has apparently been slashing budgets across the board in recent months as sales have dropped by more than 30% in the US and in other parts of the world. At the same time, the value of the dollar against the yen has also dropped, meaning that Toyota is losing out on the currency exchange. Toyota (and Honda and Nissan) are navigating the same severe rapids as Detroit, they just started further upstream. The company has slashed production, canceled a diesel engine program for its big trucks and halted construction on a new factory in Mississippi. A profit warning announcement is expected from Toyota on Monday.

[Rocky]

Hard to do well in this economy, especially with so many companies really overextended after years and years of economic expansion and optimism.

[Eleanor]

Maybe they should stop making shitty cars.

:rolleyes:

[scat19]

Originally posted by Eleanor
Maybe they should stop making shitty cars.

:rolleyes:

Not sure what you're getting at, my guess is, the typical anti-big three thread.

[TYMSMNY]

^ He was being sarcastic.

It's bound to happen in economic times like these... we're seeing it in all industries. Profits have dropped, but its not like it's the end of the world. That's in 2012.

[mekeni]

{braces for 2012}

[A790]

The auto market is definitely tough right now, but it goes to show you how fluctuations in sales can damn near screw anybody over. Their margins must be pretty low.

[Eleanor]

Originally posted by scat19
Not sure what you're getting at, my guess is, the typical anti-big three thread.
Did your tinted windshield block the :rolleyes: at the end of my post? :rofl: :D

[BerserkerCatSplat]

Originally posted by scat19


Not sure what you're getting at

:facepalm:

[Generic]

i love Toyota and even i feel for them right now

[AE92_TreunoSC]

What is stupid, the fact the states didnt encourage them to build that plant in Mississippi.

That's a lot of jobs and revenue that could have been had for that state.

Bah, they may as well keep encouraging GM to keep closing their plants and sit on the money they gave them.

[hampstor]

Like the detroit 3, they invested heavily into the truck/SUV market. Half their lineup is SUV's and trucks... so im not surprised they didnt turn a profit. They were in a better financial position going into this quarter than the detroit 3 :)

[rumeo]

with this recession its hard to not take some kind of hit

[clem24]

It's an operating loss only, and if you actually went further down the income statement, I believe they stated that they are still in the black. So HAAhaa Big 3.

[cloud7]

Originally posted by hampstor
Like the detroit 3, they invested heavily into the truck/SUV market. Half their lineup is SUV's and trucks...

plus the way they priced all their hybrids, no wonder they are not making a profit.

[black13]

It's a recession, obviously everyone is gonna take a hit. At least they are billions in debt with tax money going to their CEO's and over priced wage unions.

And isn't the smart car the only one that sales haven't gone down for?

[TYMSMNY]

Originally posted by black13
It's a recession, obviously everyone is gonna take a hit. At least they are billions in debt with tax money going to their CEO's and over priced wage unions.


Toyota = no unions + CEO took a pay cut. :thumbsup:

[bwling]

http://www.nytimes.com/2008/12/23/business/worldbusiness/23toyota.html?_r=2&hp



Published: December 22, 2008

TOKYO — Toyota Motor, the Japanese auto giant, said Monday that it expected its first operating loss in 70 years, underscoring how the economic crisis was spreading across the global auto industry.

On Monday, Toyota said it expected an operating loss in its auto operations of 150 billion yen, or $1.7 billion, for the fiscal year ending March 31. That would be the company’s first annual operating loss since 1938, a year after the company was founded, and a huge reversal from the 2.3 trillion yen, or $28 billion, in operating profit earned last year.

Analysts said Toyota’s downward revision, its second in two months, showed that the worst financial crisis since the Depression was threatening not just the Big Three but also even relatively healthy automakers in Japan, South Korea and Europe. Many other companies will also soon be reporting losses.

Worse, analysts said that they expected next year to be even more painful, amid forecasts that the global economy would continue to slide until at least the summer. This could cause a significant shakeout, driving smaller and weaker companies into the arms of a smaller number of bigger, richer players.

“It is just a matter of time before all major automakers are losing money,” an auto analyst in Tokyo for Credit Suisse Securities, Koji Endo, said. “And things will just get worse next year, when companies start losing money for the second consecutive year.”

Toyota, which just a few months ago seemed unstoppable after eight years of record profits, said it suffered from plunging vehicle sales not only in North America but also in once-promising markets like India and China, which many had hoped would prove immune to the United States malaise. Toyota’s group includes the automaker Daihatsu and the truck builder Hino.

“The change in the world economy is of a magnitude that comes once every hundred years,” Toyota’s president, Katsuaki Watanabe, told a news conference in Nagoya, Japan, near the company’s Toyota City headquarters. “We are facing an unprecedented emergency.”

Mr. Watanabe said the company would respond by suspending investment in new plants, including last week’s announced postponement in the start of a factory in Mississippi, and moving some production lines to single shifts. The company has even unplugged electric hand dryers at some offices in an effort to cut costs.

Yet Toyota said it still expected to report a small net profit, helped by interest and dividend income as well as tax-related savings of 50 billion yen, or $560 million.

With some $18.5 billion in cash, and relatively little debt, Toyota is still in far better shape to weather the downturn than General Motors and Chrysler, which on Friday received $17.4 billion in emergency loans from Washington.

In Japan, the recession could force a realignment of the country’s eight automakers, which are globally competitive but have begun feeling increasing pain from the global downturn.

The biggest drops have come in the United States, traditionally the Japanese companies’ most profitable market. After years of increasing market share at Detroit’s expense, sales at Japanese companies are sharply lower. In November, Toyota’s sales dropped 33.9 percent and Honda Motor’s 31.6 percent, both faring slightly better than G.M., which had a 41 percent decline.

Sales are also down in their home market of Japan, both because of the financial crisis and because of longer-term demographics in this rapidly aging society. Last week, an industry group announced that new car sales in Japan would drop next year below five million vehicles for the first time in 31 years.

Japan’s automakers have responded by slashing production by 2.2 million vehicles in the current fiscal year. They have also cut profit forecasts, laid off nonstaff workers and delayed investment in new factories. Last week, Honda Motor, the nation’s second-largest carmaker, reduced its profit forecast by two-thirds for the current fiscal year.

The auto slowdown has helped worsen an increasingly nasty recession in Japan’s export-dependent economy, the world’s largest after the United States. On Monday, Japan finance ministry said exports dropped 26.7 percent in November, the largest drop since statistics started being kept in 1980, to push the nation into a rare trade deficit for the month.

The financial turmoil has also hurt carmakers by driving up the value of the Japanese yen, which has risen some 25 percent since summer. A higher yen makes Japanese autos and other products more expensive overseas.

On Monday, Toyota cited the currency as one reason for revising its forecast. Analysts say Toyota has been seen as the most vulnerable of Japan’s big automakers because it has been investing heavily in new products, including a full-size pickup truck for the United States market, just as auto sales started to fall.

“They’ve caught the same cold that Detroit has caught,” said Christopher J. Richter, senior analyst in Tokyo at Calyon Capital Markets Asia. “Everything is going wrong for Toyota this year.”

Toyota also lowered its worldwide vehicle sales forecast for the fiscal year to 7.54 million vehicles, far below the 8.9 million vehicles it sold last year. It said the decline would be particularly large in North America, where it forecast it would sell 2.17 million vehicles this fiscal year, down from 2.96 million last year.

[JRSC00LUDE]

Originally posted by Eleanor

Did your tinted windshield block the :rolleyes: at the end of my post? :rofl: :D

:rofl:

[riceeater]

so they lose 1.7B this year, after a 28B profit last year.... 30B difference IS a lot of money at the end of the day, but they're only dipping a little bit into last year's profits, so i think they should have enough coushion to ride this out, even if it takes a few years for things to turn back around, which i doubt... i think in a couple years we'll be back to bitching about how filling up costs an arm and a leg, and talking again about how to make fortunes in real estate... i'm not that worried, since the same people that are telling us that this will drag on for YEARS AND YEARS, are the ones that told us that THERE'S NO WAY IN HELL THAT OIL WONT BE UP TO $200 A BARIL BY CHRISTMAS :thumbsdow :guns:

[blownz]

I read the same thing for Honda. It is good to see them struggle a bit too and not just the D3. :thumbsup:

[Mr_ET]

Obviously everyone will struggle a bit, it is expected. This is not alarming at all and realistically is probably only making the news because the Big 3 are trying to make themselves look better.

The alarming stuff is when almost everyone is making money and GM still reports huge losses like ... well... last year

[Redlyne_mr2]

With some $18.5 billion in cash, and relatively little debt, Toyota is still in far better shape to weather the downturn than General Motors and Chrysler, which on Friday received $17.4 billion in emergency loans from Washington.

Haha thats quite the understatement.

[bwling]

http://www.motorauthority.com/toyota-denies-reports-that-ceo-may-be-ousted.html



Report: Toyota founder’s grandson to replace CEO by June

Following Toyota’s shock announcement recently that the company is expecting to post a ¥150 billion ($1.7 billion) loss for the year ending March 2009, comes a new report that claims current CEO Katsuaki Watanabe may be replaced by June of this year. The news comes from Japan’s Nikkei daily, which reports that current vice president Akio Toyoda will move into the top spot.

Toyoda is the 52 year-old grandson of Toyota's founder Kiichiro Toyoda, and if given the top spot he would be the first member of the family in 14 years to become the company's president. Tatsuro Toyoda was the last president from the founder's clan.

Arrangements have been made to give Watanabe a more advisory role of vice chairman, the newspaper said without citing sources. The management reshuffle is likely to be endorsed by Toyota's top executives as early as next week, with official approval expected by the board in June.

A company spokeswoman has declined to confirm the report, only saying: "Nothing has been decided."

Speaking at last month’s profit warning, Watanabe explained that the tough economic environment was the main reason for the poor results. “We’re facing an unprecedented emergency situation. Unfortunately, we can’t see the bottom,” he told reporters.

In order to cut costs as much as possible, Toyota may have to delay launching new models, lashing research and development costs and extricating itself from non-essential activities, such as motorsport. The company has also cut its global vehicle sales forecast 8.5% to 7.54 million for the year ending March 31. It also lowered its North America sales estimate by 10% to 2.17 million vehicles.