Toyota to see first loss in 70 years
Expansion plans curtailed, partly due to U.S. slump
NAGOYA, Japan – Toyota Motor Corp. said Monday it will report the first operating loss in 70 years, acknowledging that after a decade of rapid growth it can no longer escape the slowdown plaguing the global auto industry.
The Japanese auto giant also lowered its global vehicle sales forecast for the second time this year and said it was putting ambitious expansion plans on hold, in large part because of a precipitous drop in demand in the key U.S. market.
“The tough times are hitting us far faster, wider and deeper than expected,” Toyota President Katsuaki Watanabe told a gloomy news conference at the company’s Nagoya headquarters. “This is an unprecedented crisis requiring urgent action.”
Toyota had reported strong growth in recent years, boosted by heavy demand for its fuel-efficient models like the Camry sedan and Prius gas-electric hybrid.
But Watanabe said a severe drop in demand, especially in the U.S., which accounts for one-third of vehicle sales, and profit erosion from a surging yen were too much for Japan’s No. 1 automaker. Overall U.S. auto sales fell to their lowest level in 26 years last month.
“The change that has hit the world economy is of a critical scale that comes once in 100 years,” Watanabe said.
Toyota said it expects an operating loss of $1.66 billion for the fiscal year ending in March, compared with an operating profit of $25.2 billion a year earlier.
The outlook was a dramatic change of fortune for the iconic company, which in recent years had outlined ambitious expansion plans and weathered an industry slowdown much better than its U.S. rivals.