Automobile manufacturer Toyota triples annual loss prediction

Sunday, February 8, 2009

The Japanese car making company Toyota has announced that their predicted profit loss for 2008 has tripled from their previous estimate. The company reports the loss after demand for its vehicles dropped. In December 2008, Toyota estimated its full year operating loss to be 150 billion yen (US$1.65 billion). Now the company has tripled that number, forecasting a 450 billion yen (US$4.95 billion) loss. This would be the first yearly loss at Toyota in 70 years.

The firm also said that it predicts its global sales to fall by 17.87% to 7.32 million vehicles sold, compared to last year’s 8.91 million vehicles sold. Overall for 2008, Toyota’s car sales in the United States were down 15.4%, but that number was down from 2007 in which sales dropped 18%. For the month of January alone, Toyota’s sales fell 31.7% compared to the overall U.S. sales loss of 37.1%.

As a result of the loss, 17 of the company’s 75 production lines worldwide, will be reduced to only a single shift of workers. The company also announced a full closure of all their Japanese plants for a total of 14 days between January and March 2009.

Toyota’s boss Katsuaki Watanabe described the loss as happening only “once in a hundred years”.

In January, the Japanese Nikkei newspaper said that Toyota was thinking of firing 1,000 Northern American and British workers, all of whom hold full-time positions in the company. The paper quoted Toyota’s Executive Vice President Mitsuo Kinoshita as saying that “outside of Japan, we intend to make every possible effort to protect the jobs of our employees.”