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Toyota Projects FY2008 US$1.67B Operating Loss; Revamping Operations in Response

Toyota revised its forecast for fiscal year 2009 (April 2008 to March 2009) to reflect an expected ¥150 billion (US$1.67 billion) operating loss.

Toyotaforecast
Revised sales forecast. Click to enlarge.

Among the contributors to the loss is a projected 700,000 unit decline in worldwide sales to 7.540 million vehicles from Toyota’s earlier 6 November forecast of 8.240 million vehicles. Actual sales for the prior fiscal year (FY08) were 8.913 million units.

The announcement reflects how dramatically business conditions have deteriorated for Toyota since fiscal 2007, when it scored a record operating profit...“The speed, breadth and depth [of the global economic downturn] is beyond what we had imagined,” says Toyota President Katsuaki Watanabe.

Faced with a historic loss, Toyota aims to revamp its operations so that it can turn a profit even if parent-only sales fall by 17% from 2007 results. All new production upgrades, including the opening of a plant in the US state of Mississippi scheduled for 2010, will be postponed or scaled down. Capital spending planned for fiscal 2009 will be cut 30% to less than 1 trillion yen.

—“Toyota Plans Major Overhaul As Historic Operating Loss Looms”, Nikkei, 22 Dec 08

Toyota deferred issuing sales and production targets for 2009.

Comments

ejj

All Toyota has to do to weather this storm is idle manufacturing lines within existing plants, or slow all of their lines down, or idle entire plants...lots of tricks to this trade. If they were smart though they would figure out a way to mass produce a really cheap Prius...Corolla Hybrid maybe? A little four door & coupe, in the $10000 to $15000 range. GM is going to build the Volt, but there will be a limit to the demand for pricey Pruises and Volts. ...ejj...

ToppaTom

Let's see.
7,540,000 vehicles, $2000 each = $15 Billion.
BINGO, I mean BAILOUT.
Where’s the UAW when you need them?

Reel$$

“The speed, breadth and depth [of the **] is beyond what we had imagined,”

** Pick One:

bacteria
bird flu
sea level
man-made CO2
food shortage
global warming
communicable bunions
poltergeists
housing shortage
banking collapse
alien hysteria
original ideas...

Arghhh!


HarveyD

ToppaTom:

Your maths are about correct. That's roughly what the Big-2 are getting from USA and Canada ($2000+/per vehicle produced) but they wanted and will get twice that much.

Basically, that's less than the 13% sale tax (avg. $25000 x 0.13 = $3250) we pay on each vehicle sold in Canada.

If we were to loan (give or return) all sale taxes = 13% (or equivalent) to the Big-3 to 8) they would get about $5B in Canada and over $50B in USA every year. What each one gets would be proportional to their sales. (FAIR FOR ALL!). Of course a sunset clause would limit the duration of this huge gift. A malus/bonus system (based on CO2 emission or mpg) could be added to convince the Big-8+ to produce more efficient vehicles.

Mark Murray

I'm beginning to think that this slow down / recession is all driven by the media and speculators; with forcasts as the evidence.
Toyota's fiscal year ends at the end of March they are 'forcasting' a loss for this fiscal year, it hasn't happened yet but maybe now it will.
So now they only forcast to sell 7.540 million vehicles this fiscal year, you mean to tell me they can't make a profit making that many vehicles?
I suspect that their 'growth' will show a loss, not actually a loss at all.

A recent article posted on the CBC quotes an analyist: "Canadians are in a perceived recession not actually backed up by data"

ToppaTom

HarveyD
Returning sale taxes and/or a malus/bonus system might be better than where we are headed now. When we give it to all 8, I wonder if the domestics can compete with the UAW overhead, or even without it. But anything more than labor "restructuring" is protectionism and probably violates WTO agreements.

Reel$$

"Canadians are in a perceived recession not actually backed up by data"

How many times do we hear the "Cry Wolf" scenario - before the crumbling credibility of the "press" - collapses altogether?

Hint to VR programmers: including perspectives critical of the mainstream - gives the mainstream credibility. Kinda like a paradox.

Andrey Levin

Toppa Tom:

Once upon a time, under Ronny, Japanese manufacturers “voluntarily” agreed to top Jap import of cars in US. It saved Big3, for a while.

Now, I believe the same kind of deal will happen with production of vehicles in transplant plants on US soil. Toyota, Honda, Nissan, Volkswagen, Hyundai will “voluntarily” freeze their production quotes.

Since automotive demand is inflexible, Big3 will be able to increase prices to get barely in black, with on-going restructuring. Japs&Co will enjoy windfall profits, which they will be required to re-invest in US. They will buy automotive parts manufacturers.

This is the most silent path to put Big3 120B restructuring tub on US consumers (unlike current bailout which loudly place price of Big3 restructuring on US taxpayers).

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