Toyota in the Red

Company will make a loss for the first time since 1941, when it first reported on its financial performance.

Autocar staff | http://www.autocar.co.uk | Posted December 22, 2008 Tokyo, Japan

Toyota had never lost money since it started reporting its financial performance in 1941. (Toyota photo)

Toyota has predicted that it will make a loss for the first time since 1941, when the company first reported on its financial performance.

Toyota is widely considered to be one of the best-managed car companies in the world. News that it’s struggling will send shockwaves through the motor industry.

The operating loss, announced this morning by company boss Katsuaki Watanabe, totalled 150 billion yen ($1.7b ) up to the end of Toyota’s financial year in March.

“The change that has hit the world economy is of a critical scale that comes once in a hundred years,” said Watanabe.

Toyota is still expected to make a net profit of 50b yen, although that figure is a huge drop from the projected 550b yen at the start of the year. It now expects to sell 8.96 million vehicles globally this year, down 4 percent from last year.

In a statement, the company said falling car sales had been “far faster, wider and deeper than expected”.

Much of the problem stems from America, where the car market has almost completely collapsed, eating into Toyota’s export margins.

Will Powell/Autocar magazine.

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