Japan’s Toyota Motor, the world’s largest vehicle manufacturer, yesterday announced its first annual loss and warned it would plunge deeper into the red this year because of the global economic downturn.
The firm expects a massive operating loss of about US$8.6 billion in the current business year to March, underlining the depth of turmoil in the global auto industry.
It reported an annual net loss of ¥436.9 billion (US$4.4 billion), worse than its own forecast and a dramatic turnaround from the previous year’s record profit of ¥1.72 trillion.
It is the first time that Toyota, founded 72 years ago, has finished a year in the red since it started publishing results in 1941.
The firm, which dethroned General Motors last year as world No. 1, logged an operating loss of ¥461.0 billion, against a year-earlier profit of ¥2.27 trillion. Revenue slumped 21.9 percent to ¥20.53 trillion.
Toyota president Katsuaki Watanabe blamed “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.”
The Japanese maker’s global sales fell 15 percent to 7.57 million vehicles over the year.
The results from once-invincible Toyota underscore the depth of the crisis in the worldwide auto industry, which has been battered by a slump in sales as people stop buying cars during the recession.
It expects an even worse performance in the current business year to March, predicting a net loss of ¥550 billion and an operating loss of ¥850 billion.
The global economy is expected to take some time to recover, said Watanabe, who will soon be replaced by Akio Toyoda, the grandson of the automaker’s founder.
Watanabe said Toyota would expand its line up of fuel-sipping hybrid cars this year and cut costs as part of efforts to return to profit.
Toyota overtook General Motors last year to become the world’s top selling automaker, but only because the Detroit giant’s sales fell faster than its own.
The Japanese company has idled plants and slashed thousands of temporary jobs in response to its biggest-ever crisis.
Analysts say the new president will probably have to announce more drastic steps when he takes over. The founder’s grandson is seen as one who can unite the company during the current crisis and make tough decisions about its future.
Toyota may have to take painful steps such as closing plants and firing regular workers, something that may be easier for the family scion to do, said Credit Suisse auto analyst Koji Endo.
“The founding family is still regarded as a kind of symbol,” he said.
Toyota did not announce any new steps yesterday to overhaul its operations but said it aimed to reduce costs by ¥800 billion this year.
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
RSS