Toyota loss balloons to US$8.6 billion
May 9, 2009 by David Twomey
Showing that even the apparent mighty are not immune in the current financial times, the world’s biggest car maker, Toyota, has forecast a much bigger than expected loss of US$8.6 billion.
Toyota Motor Corporation, announcing its latest results in Tokyo, said it would also sell about one million fewer vehicles this year, leaving it desperately trying to cut costs in the grip of a severe market downturn.
The global crisis that has battered demand for cars and pushed US rival Chrysler into bankruptcy has hit Toyota hard, reversing its rapid expansion into overcapacity almost overnight.
Reuters Newsagency says that currently dozens of Toyotas factories stand half idle.
The Japanese giant posted its first-ever consolidated operating loss last year after a record profit the year before.
For January-March, Toyota piled up a $6.9 billion loss, in line with most estimates, and cut its annual dividend by nearly 30 per cent, the first cut since at least 1994, when it changed its reporting period.
While the entire industry is caught in the slump and seeking to offload cars piled up in stockyards, Toyota has been especially vulnerable due to its exposure to the United States and Japan, where sales have plunged to unpredicted lows.
Reuters says that even in China, where the market has risen, Toyota has bucked trend with a fall so far this year.
“Toyota’s outlook was worse than I’d expected. The company expects a really tough time for the first six months,” Reuters quotes Naoki Fujiwara, a fund manager at Shinkin Asset Management, as saying.
“I expect the bottom for the auto industry is the April-June period, followed by a slow recovery.”
Toyota President Katsuaki Watanabe was more downbeat, stopping short of predicting when sales would pick up in major markets, or when the company would return to profitability, as it remains saddled with excess capacity.
In a rare Toyota admission of failed decision making he told a news conference: “Of course the external environment doesn’t help, but we were lacking in the scope and speed of dealing with various problems and issues, and for that I am sorry.”
For the year to next March, the maker of the Prius hybrid forecast an operating loss of 850 billion yen, more than double the average forecast in a survey of 20 analysts by Thomson Reuters.
The bleak forecasts prompted ratings agency Standard & Poor’s to downgrade Toyota’s long-term debt ratings to AA from AA+, with a negative outlook.
Toyota said it expected its global sales, including subsidiaries Daihatsu and Hino but excluding cars sold by joint ventures in China, to fall about 14 per cent in 2009/10 to 6.5 million vehicles.
Mr Watanabe said that would knock 800 billion yen off the operating level this year, which Toyota aims to offset with cost cuts.
To return to profit, Toyota must sell more cars or cut costs further, Mr Watanabe said. But he predicted the US market would be around 10 million vehicles at best this year, down from more than 13 million in 2008.
Toyota is hoping the launch this year of a third-generation Prius will ease some of its sales slide and production cuts, even though it is cutting the price of the popular model to bring it closer to Honda’s new Insight hybrid, meaning its contribution to profits would be smaller than planned.
Domestic rival Honda Motor Co last week forecast a small profit for this year thanks to its relatively healthy motorcycle business.
“Compared with Honda, Toyota has a lot of larger models and a lot of excess capacity globally,” said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments.
“By 2010, cost cutting and capacity reduction may be taking effect, so they could break even then.”
Print it: 
If Toyota can’t win a race/championship on a budget that’s greater than the other 3 major manufacturers combined –
I don’t hold much hope for them when they have budget restrictions imposed on them
Quote “Last quarter’s financial news has been brutal for all that have reported, but the biggest blow has just come from one of the world’s most successful automotive powerhouses. Toyota has posted a last-quarter loss of $7.7 billion; the worst loss of the company’s 71-year history and worse than even GM’s just-reported loss of $6 billion. Toyota now expects to lose $5.5 billion for the year ending March 2010, surpassing the $4.4 billion it lost in the just-concluded year.
The reasons for Toyota’s reversal of fortune is well documented. Global sales were down 21.9% last year, with the most stark losses occurring in the U.S. and Europe. The Yen also made strong advances against the U.S. Dollar, further hurting the Japanese automaker. While sales took a big dive during the last fiscal year, Toyota expects to lose another one million unit sales globally in the next year.”"end quote
Dont tell me Toyota arent hurting! Your living in lala land if you think its pocket change to them!
Yeah but Clive, only just over a year ago Toyota was making their highest profit ever. Unless you are saying that all of the sudden the build quality of toyota has dropped in the last 12 months, then their financial predicament is nothing to do with the quality.
Sounds like a “get out of jail card”, for Toyota. Lets blame FIA for our failure to command F1.
Toyota gets out of F1 end of year and saves millions.
How Toyota Defies Gravity
Its secret is its legendary production system. Though competitors have been trying to copy it for years, nobody makes it work as well as Toyota.
Alex Taylor III
Reporter Associate Jeremy Kahn
Fortune Magazine
Two days a month, more than 50 automotive executives and engineers travel to a sprawling manufacturing complex in Georgetown, Ky., to learn how Toyota makes cars. The tours, which include an intensive question-and-answer session, last five hours and are booked months in advance. Although the visitors all work for competing automakers, Toyota charges them no money and places nothing off limits. Lately Ford and Chrysler technicians have been regular visitors to one of the two assembly lines, while General Motors personnel have demonstrated a particular interest in the powertrain operations.
Toyota flies
Toyota’s showing the opposition how it makes cars is a bit like Coke’s giving Pepsi a peek at its secret syrup formula. The Toyota Production System on display at Georgetown applies not just to manufacturing but also to almost everything Toyota does, from product development to supplier relations and distribution. But Toyota officials don’t mind. Deep down, they know that the TPS techniques that visitors see on their tours–the kanban cards, andon cords, and quality circles–represent the surface of TPS but not its soul. Toyota isn’t worried about giving away any important secrets on a plant tour.
That may sound arrogant, but the evidence supports the conviction: Despite years of imitation, nobody has succeeded in displacing Toyota as the world’s most proficient auto company. Mercedes-Benz may dazzle with its sophisticated engineering, Honda with its engine technology, and Chrysler with its styling. But Toyota sets the standard in efficiency, productivity, and quality. GM officials say Toyota is the benchmark in manufacturing and product development. A high executive at BMW whispers that, national pride notwithstanding, he regards Toyota as the best car company in the world.
The Corolla is a line of subcompact/compact cars produced by the Japanese automaker Toyota, which has become very popular throughout the world since the nameplate was first introduced in 1966. In 1997, the Corolla became the best selling nameplate in the world, with over 35 million sold as of 2007.[1] Over the past 40 years, one Corolla car has been sold on average every 40 seconds.[2] The modern Corolla shares only the name with the first generation car, as the series has undergone several major redesigns. The current North American Corolla is priced and sized in between the Yaris and the Camry.
Lexus Earns Best-Selling Luxury Brand Title for Sixth Consecutive Year
Surpasses 300,000 Sales in Record-Breaking Year
TORRANCE, Calif., Jan. 4 — Lexus surpassed 300,000 in annual sales for the first time ever in 2005, retaining the crown as American’s No. 1-selling luxury brand for the sixth consecutive year. Total U.S. sales came to a best-ever 302,895, up 5.5 percent from 287,927 in 2004.
Since its inception in 1989, Lexus has enjoyed steady growth and expanded business, success the company attributes to its devotion to the pursuit of perfection and its total focus on the customer experience.
“At Lexus, we believe that the ultimate success is a satisfied and loyal customer,” said Bob Carter, Lexus group vice president and general manager. “Our business model is based on treating every customer like a guest in our own home, which means providing the highest quality of attention and care at every level: from design conception to dealership and from purchase to service. This, more than any number, is our goal at all times.”
The 300,000-unit milestone has been achieved only on three other occasions, by Cadillac, in the mid 1980s. Since that time, no other luxury nameplate has been able to reach this sales pinnacle, even in a thriving auto market.
Sales of Lexus passenger cars achieved all-time record-breaking results with 151,226 units, an increase of 11.5 percent over 2004. The Lexus flagship LS 430 premium luxury sedan continues to be the segment leader with sales of 26,043 units. The all-new GS mid-luxury sport sedans and IS entry-luxury sports sedans contributed heavily to the record year. The GS 300/430 achieved best-ever year-end combined sales of 33,457 units. The GS 300 recorded best-ever monthly sales of 2,973 units, an increase of 305 percent, while the GS 430 posted sales of 458 units, an increase of 349 percent. The all new IS entry-luxury sport sedans, which debuted in October, enjoyed a best-ever overall combined sales month of 4,518 units, an increase of 573.3 percent over the same period last year. The IS 250 reported sales of 2,887 units, while the 306-hp IS 350 enjoyed sales of 1,631 units.
Lexus luxury utility vehicles enjoyed a banner sales year, up 0.2 percent at 151,669 units. The RX 330 was the luxury utility vehicle sales leader in 2005 with 108,775 combined units sold, an increase of 2.4 percent over the same period a year ago. It was the second year in row for the RX to reach 100,000 units in annual sales. The RX 400h, the world’s first hybrid-luxury vehicle introduced in April, earned sales of 20,674 units in 2005. The GX 470 mid-size luxury utility vehicle recorded a best-ever sales month in December of 4,599 units, a 4.4 percent increase over 2004.
In addition to record-breaking new-vehicle sales, Lexus Certified Pre-Owned (CPO) vehicle sales hit all-time record highs in 2005. Lexus CPO sales of 45,998 for the year were up 5.3 percent over 2004 calendar year totals. For the fourth year in a row, Lexus Certified Pre-Owned (CPO) Vehicles ranked first in customer satisfaction in the 2005 J.D. Power and Associates Used Vehicles Sales and Certification Study (UVSC).
Well-recognized for the excellence of its vehicles, Lexus has topped J.D. Power and Associates Vehicle Dependability Study (VDS) for 11 years running. 2005 marks the fifth consecutive year with Lexus as the top-ranked nameplate in the association’s Initial Quality Study (IQS), making a clean sweep of five individual segment awards. The SC 430 topped the entire study, as well as the premium luxury car segment with the LS 430 in second. In the APEAL Study, Lexus had the highest number of models at the top of their respective segments: the GS 300/430, RX400h, LS 430 and IS 300/IS 300 SportCross. Lexus also ranked number one in the J.D. Power and Associates 2005 Customer Retention Study(SM), gaining 3.5 percentage points from 2004 to take the lead in 2005 by retaining 63.0 percent of its customers. The industry average was 49.6 percent.
“Our bottom line is not a dollar figure, it is an experience — the customer experience,” Carter explained. “In recent years we have worked to expand that customer base by delivering the industry’s first luxury hybrid SUV as well as by continuing to improve upon already proven and loved vehicles.”
Lexus’ focus on progress is reflected in the performance and innovation of the all-new IS and GS luxury sedans. The brand continues to make strides in multiple arenas with its ongoing dedication to expanding hybrid technology into other models. Design is critically important as well, with a whole new design direction leading the way towards vehicles that appeal as much to the eye and the senses as they do the driving connoisseur.
“We started out to be the best,” Carter said. “We never imagined we would be the biggest. Lexus is about providing our customers the best possible experience. One that we know will keep getting better and better.”
For nine of the last 10 years the best-selling passenger car in America has been Camry, and Toyota marketers and engineers are taking no chances that it will suffer the same fate as Taurus.
Increased competition from Korean as well as Japanese and U.S. automakers really sliced up the midsize car pie in the last decade, but Camry continues to set the pace.
Toyota Camry
Top Ten Best Selling Vehicles of 2008
436,617 Units Sold: Toyota, and specifically the midsize Camry sedan, has a well-earned reputation of providing transportation for the masses of Americans that just want to get from one place to another with a reasonable amount of style and a great deal of reliability. Those virtues were enough to earn the Camry some 436,617 sales, making it the best-selling passenger car in America.
Troubling economic times have hit many companies – especially carmakers – hard, tarnishing brand image and decreasing confidence in their fitness for the future. Toyota seems to have escaped untouched, however, with two recent surveys naming it the most respected company in the world and the most trusted automotive brand in Australia.
A comprehensive survey by New York-based private research and consulting firm Reputation Institute took stock of over 1,000 companies’ brand images, evaluating respondents’ perceptions of trust, esteem, admiration and good feeling to determine the final result. Ranking as the only automobile manufacturer with a score of more than 80 – placing it in the top tier of all manufacturers – Toyota also finished first in five of seven categories overall, earning it the title of World’s Most Respected company.
The product is the driving force, though volume sales pose risks
Strong consumer perceptions of quality and value along with safety and reliability put the Toyota brand at the top of the charts. The way the company stands behind its products also influenced the results, showing that not only consumers, but the company itself, has confidence in the cars produced.op automotive brand in Australia, and not just in sales
According to a survey by Australian Reader’s Digest, Toyota ranks as the most trusted brand in Australia as well. That trust is given ample evidence by the actions of the Australian buying public.
The strong June market, and the record first six months of 2008, saw Toyota set several records for overall sales volume, putting it over 11 market share points ahead of closest rival, Holden. Total vehicle sales in June cleared 25,000 for the first time ever for any vehicle manufacturer in Australia’s history. Toyota also set a fiscal year record, selling over 247,500 vehicles, the first time any carmaker has broken the 200,000 mark.
It’s clear that on the raw numbers alone, Australians have been voting Toyota the number one brand in Australia for quite some time.
Toyota was Australia’s best-selling brand in 2008 with 238,983 vehicles (23.6 per cent market share) followed by Holden with 130,338 (12.9 per cent of the market) and Ford with 104,715 vehicle sales (10.3 per cent market share).
Toyota was Australia’s best-selling brand in March with 16,608 vehicles (22.0 per cent market share) followed by Holden with 9,188 (12.1 per cent of the market) and Ford with 7,570 vehicle sales (10.0 per cent market share).
Year-to-date, Toyota leads the market with 44,309 vehicles sold, followed by Holden with 26,979 and Ford with 20,986 vehicles.
FINALLY, WHITE GOOD IS BETTER THAN CRAP FLEET CARS.YES…TOYOTA OWNERS ARE BORING BECAUSE THEY DON’T HAVE TO OPEN THEIR CARS BONNET TO FIND OUT WHAT IS WRONG WITH THE CAR.YES…BOGAN HAVE NO TIME FOR BORING…BECAUSE THEY HAVE TO TRY TO FIXING THESE COMMON FAULTS FOREVER FROM DINOSAURS.BRAKES?RUSTS IN LESS THAN 3 YEARS OLD DINOSAURS?YOU NAME IT..YOU GOT THEM.BY THE WAY..HAVE YOU EVER SEEM THE BREAK DOWN TOYOTA LATELY?KEEP FIXING YOUR DINOSAURS.VERY FUNNY.
TOYOTA MADE 22 BILLIONS PROFIT LAST YEAR.NUMBER ONE BRAND IN THE WORLD….SHOULD I GO ON?THERE IS MORE IMPORTANT THINGS IN LIFE THAN HOW TO QUICK CORNER YOUR FLEET CARS.THE WORLD IS BIGGER THAN YOU THINK.TIME TO WAKE UP AND GET A LIFE.L
No SOB, you shouldn’t go on.
You’re just as boring as the toyotas you love.
We all know you can cut & paste, although I didn’t see the article where Audi outsold Lexus in Oz last year….
http://www.carsales.com.au/new.....pain-14728
In your world there would only be one car maker; no possibility of variety, fun, or attractive styling.
Sick of bogan, please refrain from posting any more :)
If it annoys me (a toyota driver) I can’t imagine what others might think.
But JasonP
Describe Attractive Styling?
Isnt this trait based on each individual and NOT a FACT… basically you cannot say something is beautiful and call it a fact. It’ll never be 100% acceptance as BEAUTY is not a fact but an opinion. In contrary, yes in some instances a majority of people will have the same opinion that something is beautiful but it’ll never be taken as “fact”.
Fact in here is that the market share is down significantly, Toyota had a record profit last year, so this year’s projection is compared to last year and the massive difference can easily be explained using sales between the year.
Second, It is KNOWN fact that Toyota has been expanding tremendously the last 7 years and yes quality has taken a dip but not enough to call them “bad” cars. If some here can actually read japanese news, Toyota has acknowledged this issue and its one of the main concerns for them. Toyoda-san (the next president) has also addressed “excitement and quality” as main issues when he takes over. He knows that profit and concervativeness has dominated Toyota’s goals recently.
Bottomline though, this economic crunch is hurting everyone and it shows that even an efficient manufacturer as Toyota is greatly affected.