Toyota's Watanabe in crisis mode after N.A. loss

[DainBramaged]

The once mighty Toyota profit machine tumbled to a rare loss in North America, sending President Katsuaki Watanabe into crisis mode as he slashed sales and profit predictions.

Toyota Motor Corp. now expects global operating profit to plummet 73.6 percent to ¥600.0 billion, or $5.83 billion in the fiscal year ending March 31.

Just three months ago, Toyota had forecast operating profit to drop a comparatively modest 29.5 percent to $15.5 billion. The new goal would be Toyota's lowest operating profit since the company began calculating in U.S. accounting standards in 1998.

The U.S. market meltdown has upended Toyota's profit picture.

North America slumped to a $335.9 million operating loss in the April-September fiscal first half. Sales there slid 9.4 percent to 1.36 million vehicles in the period.

"This is an unprecedented situation," Executive Vice President Mitsuo Kinoshita said here today while delivering financial results. "Every week, the environment gets worse."

Kinoshita said things won't improve until late 2009 at the earliest.

Watanabe is chairman of a committee charged with keeping Toyota in the black in 2009 and 2010. Details are scant, but the committee will review everything from pricing to the product pipeline.

Aside from shriveling U.S. demand, Toyota also is getting hit by a rising yen. The yen has gained nearly 12 percent against the dollar since August, reducing the value of dollar-denominated sales when converted back into Toyota's home currency.

Looking ahead, Toyota also slashed its global sales target. It now expects sales to fall 7.6 percent to 8.24 million units this fiscal year. It had earlier forecast 8.74 million vehicles.

Net income also will fall significantly, Toyota warned. The new outlook calls for a 68.0 percent drop to $5.34 billion for the year. That is less than half Toyota's earlier forecast for net income of $11.7 billion.

http://www.autonews.com/article/20081106/ANA02/811069985/1078 (subscription only)

[Jackpine Radical]

1. Slash profit predictions. That's the first step for a Japanese executive.

Step 2 is Slash Workforce.
Step 3--Slash belly.

[Elidor]

9. O my, I shouldn't laugh at that

But I did.

[TreasonousBastard]

2. So, who's gonna chime in and tell us...

how it's all their fault for not knowing how to manage a company and making shitty cars?

After all, that's why Ford and GM are on the rocks, right?

[Fumesucker]

3. Toyota is on the rocks?

One quarter of losses does not equal being "on the rocks".

[ogneopasno]

5. A 70 percent drop in profit in one quarter brings the rocks in sight, however.

[Fumesucker]

8. It will be interesting to see how other import brands are doing. n/t

[Mike 03]

4. If wonder if this has anything to do with the rise of the Yen against other currencies?

Making the vehicles more expensive to export, and less likely for the U.S., U.K, and E.U. to buy them. They make great cars.

[Fumesucker]

6. The article mentioned currency difficulties.. n/t

[Mike 03]

7. Oops, sorry NT

[DainBramaged]

10. Huge problems when their profit magnets, SUVs and trucks, stop selling.