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| Toyota braced for historic loss | Toyota braced for historic loss |
| (about 1 hour later) | |
| Japan's biggest carmaker Toyota has forecast its first annual loss in 71 years due to plummeting sales and a surge in the value of the yen. | Japan's biggest carmaker Toyota has forecast its first annual loss in 71 years due to plummeting sales and a surge in the value of the yen. |
| The firm said it expected a loss of 150bn yen (£1.1bn) in yearly operating profits - from its core operations. | The firm said it expected a loss of 150bn yen (£1.1bn) in yearly operating profits - from its core operations. |
| Company chief Katsuaki Watanabe said the current downturn was of a size that came only "once in a hundred years". | |
| Japan posted a trade deficit in November of $2.5bn (£1.7bn) as exports fell at a record rate. | |
| The rising yen saw export levels down 26.7% from a year earlier, the ministry of finance said. | The rising yen saw export levels down 26.7% from a year earlier, the ministry of finance said. |
| The carmaker had recorded an operating profit of 2.27 trillion yen last year. | |
| Toyota said it still expected to make a profit on a net level for the year ended March but has cut its forecast sharply to 50bn yen, down from a previous estimate of 550bn yen. | Toyota said it still expected to make a profit on a net level for the year ended March but has cut its forecast sharply to 50bn yen, down from a previous estimate of 550bn yen. |
| It is the second profit warning by Toyota in less than seven weeks. | It is the second profit warning by Toyota in less than seven weeks. |
| This latest estimate is far lower than its net profit of 1.7 trillion yen earned the previous year. | |
| Falling sales | Falling sales |
| The change that has hit the world economy is of a critical scale that comes once in a hundred years Katsuaki Watanabe,Toyota president class="" href="/2/hi/asia-pacific/7795390.stm">Living with recession Toyota's president Katsuaki Watanabe said the company now expected to sell 8.96 million vehicles around the world this year, down 4% from the previous year. | |
| The drop in vehicle sales over the last month was "far faster, wider and deeper than expected", he said. Unlike previous years, Mr Watanabe gave no sales goal for 2009. | |
| Toyota said in a statement it was cutting its profits forecast because of the soaring yen "as well as a review of sales plans following a faster than expected contraction of the auto market". | Toyota said in a statement it was cutting its profits forecast because of the soaring yen "as well as a review of sales plans following a faster than expected contraction of the auto market". |
| The company has said it will cut thousands of temporary workers' jobs at its plants in Japan, but said its full-time employees will be protected. | |
| Japanese carmakers have all been hurt by plummeting car sales in their key overseas markets, including the US. | Japanese carmakers have all been hurt by plummeting car sales in their key overseas markets, including the US. |
| The surging yen has eroded their overseas earnings and also hit their profits - the dollar has fallen to 13-year lows against the Japanese currency. | The surging yen has eroded their overseas earnings and also hit their profits - the dollar has fallen to 13-year lows against the Japanese currency. |
| Honda last week cut its annual profit forecast by 67% and outlined a list of counter-measures such as putting off non-urgent investments to prop up its profitability. | |
| Deteriorating sector | Deteriorating sector |
| In the United States, President Bush threw the struggling carmakers General Motors and Chrysler a lifeline of up to $17.4bn to stave off bankruptcy as they reel under slumping demand. | In the United States, President Bush threw the struggling carmakers General Motors and Chrysler a lifeline of up to $17.4bn to stave off bankruptcy as they reel under slumping demand. |
| Commenting on Toyota's latest announcement, analysts said it underlined the problems now facing Japan's car exporters. class="lp" href="http://news.bbc.co.uk/1/hi/talking_point/default.stm">HAVE YOUR SAYIf people want to buy their cars it will survive if not it will fail just the same as every non-viable business.Freda, Newcastle class="" href="http://newsforums.bbc.co.uk/nol/thread.jspa?forumID=5838&edition=1&ttl=20081222152719">Send us your comments | |
| "This is very, very, very bad. There's a chance that they could fall into the red in the next business year as well," said Koichi Ogawa of Daiwa SB Investments. | "This is very, very, very bad. There's a chance that they could fall into the red in the next business year as well," said Koichi Ogawa of Daiwa SB Investments. |
| "This is also not just a problem for Toyota. What is good for Toyota is good for the Japanese economy." | "This is also not just a problem for Toyota. What is good for Toyota is good for the Japanese economy." |
| Fujio Ando of Chibagin Asset Management added: "This shows how rapidly and badly the auto sector has deteriorated." | Fujio Ando of Chibagin Asset Management added: "This shows how rapidly and badly the auto sector has deteriorated." |
| "Toyota will likely revise down its earnings numbers or sales forecast again in late January or February as I don't think the business environment will become any better," he said. | "Toyota will likely revise down its earnings numbers or sales forecast again in late January or February as I don't think the business environment will become any better," he said. |
| Output slashed | Output slashed |
| Japan typically runs a trade surplus due to strong demand for its products - but the surging yen has hit demand for its goods. | Japan typically runs a trade surplus due to strong demand for its products - but the surging yen has hit demand for its goods. |
| Japanese exports fell sharply to all areas but those to the US were worst-hit, plunging 33.8% - also a record drop. | Japanese exports fell sharply to all areas but those to the US were worst-hit, plunging 33.8% - also a record drop. |
| Shipments to the European Union were down 30.8% while those to China fell 24.5%, the biggest fall since 1995, said Reuters news agency. | Shipments to the European Union were down 30.8% while those to China fell 24.5%, the biggest fall since 1995, said Reuters news agency. |
| Exports to the rest of Asia declined 26.7%. | Exports to the rest of Asia declined 26.7%. |
| Imports were also down - 14.4% overall - due in part to lower oil prices. | Imports were also down - 14.4% overall - due in part to lower oil prices. |
| Japan's economy - the world's second-largest, after the US - has slipped into its first recession in seven years after two quarters of negative growth in a row. | Japan's economy - the world's second-largest, after the US - has slipped into its first recession in seven years after two quarters of negative growth in a row. |
| The government has forecast zero growth in the year ending March 2010. | The government has forecast zero growth in the year ending March 2010. |
| Are you in Japan? Have you been affected by the recession? How has the economic crisis affected your spending habits? | Are you in Japan? Have you been affected by the recession? How has the economic crisis affected your spending habits? |