TOKYO (AP) | Toyota forecast its first annual net loss since 1950 on Friday as plunging demand for cars, especially in the U.S., and the strong yen pummeled earnings of the world’s No. 1 automaker.
Toyota Motor Corp. reported a 164.7 billion yen ($1.8 billion) loss for the October-December quarter, down sharply from the 458.6 billion yen profit for the same period the previous year. Quarterly sales plunged 28.4 percent to 4.8 trillion yen.
Joining a string of Japanese companies that now are expecting to slide into the red for the year, Toyota said it expects a net loss of 350 billion yen ($3.85 billion) for the fiscal year through March, a stunning reversal from the record 1.72 trillion yen profit it posted the previous year.
In December, Toyota, maker of the Prius hybrid and Camry sedan, thought it would eke out a small annual net profit, but the outlook has darkened since then, particularly as the U.S. auto market has collapsed.
“Toyota is having serious problems responding,” said Yasuaki Iwamoto, analyst with Okasan Securities Co. in Tokyo. “It boasts a full and global lineup of products. But the world’s auto demand changed in a flash.”
Since the company can’t count on global sales picking up next fiscal year, at best it can aim to cut costs to minimize the damage, Mr. Iwamoto said.
The last time Toyota had the equivalent of a net loss was in 1950, when it reported just parent results under different accounting standards than it uses now. It has not had a quarterly net loss since it began reporting quarterly numbers in 2002.
Toyota, which last year overtook General Motors Corp. to become the world’s best-selling auto company, is shutting down production at its 11 plants in Japan for 14 days during the first three months of this year, and further such suspensions may be needed.
The company announced no further job cuts Friday. It has said it plans to reduce the number of contract workers - who lack most of the benefits given to regular salaried workers, including the tacit guarantee of lifetime employment - from 8,800 in June last year to 3,000 in March.
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