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Toyota Posts $4.7B Operating Loss for FY09, Forecasts $8.6B Loss for FY10; Focus on Hybrids, Compact Vehicles and Cost Reduction to Recover

Hit with an operating loss of ¥461 billion (US$4.7 billion) for the fiscal year that ended 31 March 2009, and expecting a further operating loss of ¥850 billion (US$8.6 billion) for fiscal 2010 (ending 31 March 2010), Toyota Motor Corporation said it will try to recover through a more selective deployment of its resources, with a focus on hybrids, compacts and cost-reduction.

Commenting on the financial results, TMC President Katsuaki Watanabe said, “Both revenues and profits declined severely during this period. The negative impact was a consequence of the significant deterioration in vehicle sales particularly in the US and Europe, the rapid appreciation of the yen against the US dollar and the euro and the sharp rise in raw materials.

  • In FY2009, Toyota’s consolidated sales totaled 7.57 million units, a decrease of 1.34 million units from the last fiscal year.

  • In Japan, vehicle sales were 1.95 million units, a decrease of 243 thousand units compared to the last fiscal year. Operating income from Japanese operations decreased by 1.68 trillion yen to a loss of 237.5 billion yen.

  • In North America, vehicle sales totaled 2.21 million units, a decrease of 746 thousand units. Operating income decreased by 695.5 billion yen to a loss of 390.2 billion yen including 73.9 billion yen of valuation losses from interest rate swaps. Operating income excluding the impact of valuation losses on interest rate swaps decreased by 713 billion yen, to a loss of 316.3 billion yen, mainly due to decreases in both production and vehicle sales.

  • In Europe, vehicle sales were 1.06 million units, a decrease of 222 thousand units. As a result, operating income decreased by 284.8 billion yen to a loss of 143.3 billion yen.

  • In Asia, vehicle sales were 905 thousand units, a decrease of 51 thousand units. Operating income decreased by 80.3 billion yen, to 176.1 billion yen.

  • In Central and South America, Oceania, Africa and the Middle East etc., vehicle sales were 1.44 million units, a decrease of 84 thousand units. Operating income for Central and South America, Oceania and Africa decreased by 56.3 billion yen to 87.6 billion yen.

TMC estimates that consolidated vehicle sales for the fiscal year ending 31 March 2010 will be 6.5 million units, which is a further decrease of 1.06 million units from the fiscal year 2009, due to continuance of the current severe conditions of each market.

Based on this assumption, and on an exchange rate of ¥95 to the US dollar and ¥125 yen to the euro, TMC forecasts a consolidated net revenues of 16.5 trillion yen and an operating loss of ¥850 billion yen.

Commenting on the outlook, TMC President Katsuaki Watanabe said:

It appears to take some more time before the financial markets in the US and Europe normalize and the global economy recovers. However, in the 2010 fiscal year, we plan to accelerate our profit improvement activities including the expansion of our hybrid vehicle line-up such as the next generation Prius in May and the Lexus’ HS250h in July. All totaled, we plan to launch four hybrid models in Japan and three models overseas within this fiscal year. Through the reduction of variable and fixed costs, we estimate our total profit improvement in fiscal year 2010 will be around 800 billion yen.

For the mid-term, we plan to thoroughly analyze our customers’ needs in each region and develop product line-ups which will focus on hybrid and compact vehicles with more cost reduction efforts. We will also concentrate on resource-rich and developing countries with the aim of providing high-quality, affordable and attractive models from the customers’ viewpoint. In addition, we will continue to accelerate commercialization of next-generation technologies in the areas of environment, energy and safety including hybrids, plug-in hybrids, next-generation batteries, bio fuels and fuel cell vehicles. We also aim to establish flexible and effective systems in the areas of development, production and sales to respond to changes in business environment.

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