Toyota forecasting A$11.3 billion loss

It's not just the US giants bleeding from every orifice. Toyota has also admitted that it's facing a massive 850 billion yen (A$11.3 billion) group operating loss and a 550 billion yen (A$7.3 billion) net loss for the year ending next March.

If reality follows the pessimistic forecast, this will be Toyota's biggest ever loss since it was founded in 1937, and its second straight year of operating on the wrong side of the ledger.

As the global economy reverses at breakneck speed and the Japanese yen strengthens against other major currencies, group sales for the fiscal year have plunged from 7.57 million to an anticipated 6.5 million vehicles. Many of the shunned model lines include big and thirsty pick ups and four-wheel drivers produced for the contracting US market.

Compounding Toyota's troubles and impacting on overseas profits are currency shifts, in particular the yen's strength against the greenback and the euro.

Toyota President Katsuaki Watanabe didn't avoid the truth at a news conference in Tokyo last week, suggesting that while China and India are showing some improvement, he's not expecting the prime US and European markets to normalise quickly.

Underscoring the suddenness of the economic about-face, the huge losses contrast starkly with the 2.27 trillion yen group operating profit and 1.72 trillion yen net profit Toyota posted just 14 months ago.

Toyota intends to tackle its losses by cutting manufacturing costs and fixed costs by A$10.6 billion in the present financial year. It also plans to ramp up efforts to get a range of smaller greener cars to market.

In Australia, Toyota remains a comfortable sales leader in a saggy year-to-date market which is 20.3 per cent down on the first four months of 2008.

But according to sales data from VFACTS, its new vehicle market share has shrunk from 23.3 per cent to 20.7, and sales YTD are off nearly 30 percent. Comparing its nearest rivals, Holden is down 21 per cent and Ford running 19.4 per cent below the same period in 2008.

All market segments are down, but those taking the biggest hit are large SUVs (off 46.7 per cent) and large luxury cars (down 46 per cent).

In the market for a new car? Check out Australia's Best Value Cars.

Sign up here to receive the latest round-up of Wheels news, reviews and video highlights straight to your inbox each week.

Want free access to 5 years of Wheels archive content? Sign up now!