Toyota slashed its profit forecast yesterday for the fiscal year, barely breaking even at ¥50 billion (US$555 million), as Japan’s top automaker gets hammered by plunging global demand and a surging yen.
That’s a tiny fraction of its ¥1.7 trillion net profit from the previous fiscal year through March.
“The change that has hit the world economy is of a critical scale that comes once in a hundred years,” Toyota president Katsuaki Watanabe said at the company’s Nagoya office.
The drop in vehicle sales over the last month was “far faster, wider and deeper than expected.”
Sinking sales in the US in the wake of the financial crisis have dealt a heavy blow to Japanese automakers. But Watanabe said that emerging markets, which had held up in the beginning, were also slowing down now.
The surging yen, which erodes overseas earnings, has battered profits. The dollar has fallen to 13-year lows of about 90 yen recently.
Toyota Motor Corp, which makes the popular Camry sedan and Prius gas-electric hybrid, now expects to sell 8.96 million vehicles around the world this calendar year, down 4 percent from what it sold last year, Watanabe told reporters.
Unlike previous years, he gave no goal for next year.
In July, Toyota lowered its global vehicle sales target for this year to 9.5 million from the initial 9.85 million. Last year, it sold 9.37 million vehicles around the world.
Toyota also lowered its sales forecast for the fiscal year through March to ¥21.5 trillion, down about 18 percent from its earlier projection at ¥23 trillion.
Grabbing attention in recent years has been whether Toyota would dethrone Detroit-based General Motors Corp as the world’s No. 1 in annual vehicles sales.
But the mood was pure gloom at the president’s annual year-end event.