Toyota sees first annual net loss since 1950

[Naveed Yaseen]

TOKYO, Feb 6: Toyota, the world’s largest automaker, sank into the red for the October-December quarter and acknowledged on Friday it was heading for its first annual net loss since 1950 because of plunging global sales and the strong yen.

Joining a string of Japanese companies that have slashed forecasts, Toyota Motor Corp. said it expects a net loss of 350 billion yen ($3.9 billion) for the year through March.

That’s a stunning reversal from the record 1.72 trillion yen profit the maker of the Prius hybrid and Lexus luxury car posted the previous fiscal year.

Just a few hours before the earnings were released, Moody’s Investors Service lowered its top credit rating of “Aaa” on Toyota by one notch to “Aa1,” citing fears about its profitability.

Toyota’s global vehicle sales for the October-December quarter shrank by 443,000 vehicles from the same period a year earlier to 1.84 million, as sales dropped throughout the world, including North America, Europe, Japan and other Asian nations, it said.

Nissan Motor Co., the nation’s No. 3 automaker, reports earnings on Monday. Smaller automakers Mitsubishi Motors Corp. and Mazda Motor Corp. have already projected losses for the fiscal year.

Kinoshita promised Toyota will turn itself around through cost cuts and new products.

In December, Toyota thought it would eke out a small annual net profit, but the outlook has darkened further since then, especially amid a dramatic contraction in the US auto market.

For the fiscal third quarter, Toyota racked up a 164.7 billion yen loss, down sharply from the 458.6 billion yen profit it had the same period the previous year, as the global slump squelched sales.

Quarterly sales plunged 28.4 per cent to 4.8 trillion yen.

Toyota also lowered its global vehicles sales forecast for the fiscal year by 220,000 vehicles from its December forecast to 7.32 million vehicles.

Honda Motor Co., Japan’s second-biggest automaker, expects to stay in the black for the year through March at 80 billion yen profit, although that’s down 87 per cent from the record 600 billion yen the previous year.

BMW: German automaker BMW said that it had achieved sales of 53 billion euros ($71.6 billion) in 2008, five per cent below the level one year earlier.

After recording sales of 56 billion euros in 2007, the group said in a statement on Friday that the auto market had slumped sharply in the fourth quarter of last year.7

Sales of BMW’s three auto brands, which include Mini and Rolls-Royce, fell by 9.4 per cent to 48.8 billion euros, while motorcycle sales edged up by 0.2 per cent to 1.2 billion.

ELECTRONICS: The global slump and the rising yen have pummeled all Japanese exporters, including electronics makers Sony Corp. and Panasonic Corp., which are both forecasting losses for the fiscal year through March.

Japan’s Sharp Corp said it expected its first-ever operating loss this year and would eliminate 1,500 jobs as its revenue from high-end televisions plummets in the recession.

Sharp expects an operating loss of 30 billion yen (335 million dollars) in the year to March 31, down from a previous forecast of a 130 billion yen profit.

Sharp said it would eliminate non-permanent 1,500 jobs at factories by the end of the year to March.—AFP

http://www.dawn.com/2009/02/07/ebr18.htm