<p>The Japanese automaker said it lost ¥765.8 billion, or $7.7 billion, in the first three months of the year – even more than $5.9 billion lost by its American rival, General Motors, in the same period.<br />Toyota blamed its woes on the slump in global demand and a strong yen, which makes exports from Japan more expensive. The devastating numbers from the final quarter of fiscal year contributed to a worse-than-expected net loss of ¥436.9 billion, or $4.4 billion, for the year that ended in March. <br /><br />The automaker warned it would lose another ¥550 billion, or $5.5 billion, this fiscal year. It cut its annual dividend by nearly 30 per cent, its first cut to the dividend in at least 15 years. <br />“It will take more time before the financial markets in the US and Europe normalise and the global economy recovers,” Toyota President,Katsuaki Watanabe said. “We were lacking in scope and speed in dealing with various problems and for that I am sorry.” The deep loss is a stark turnabout from the record profit of ¥1.72 trillion that Toyota booked the previous year. Annual sales slumped 22 per cent, to 20.529 trillion yen. The loss also caps a roller-coaster year for Toyota, which in 2008 dethroned GM in terms of vehicles sold worldwide, a post Detroit-based automaker had held for 77 years.<br /><br />No bankruptcy<br /><br />Analysts say Toyota has strong cash reserves, and is far from bankruptcy that has befallen American carmaker Chrysler and that threatens General Motors. Still, Standard & Poor’s lowered its long-term credit rating on Toyota a notch to AA, third-highest rating, and gave a negative outlook for the company.<br />“Toyota maintains a minimal financial risk profile, characterised by a strong capital structure with massive liquidity,” Standard & Poor’s said. But with auto demand forecast to remain sluggish into 2010, Toyota will likely struggle before it can stage a recovery, S&P said.<br />Toyota’s latest forecast paints a grim picture for the year ahead. Toyota has been hit hard in its biggest market, the US, where sales have plunged and show few signs of recovering. In April, it sold 126,540 cars in the US – a 42 per cent drop from a year earlier – slipping behind Ford, which sold almost 130,000 cars.<br />Toyota has also suffered double-digit percentage drops in Japan as well as in China, where it is losing out to rivals with a wider lineup of smaller cars that have surged in popularity. Toyota has expected its global unit sales to fall about 14 per cent, to 6.5 million vehicles, in the year ending in March 2010.<br /><br />Focus on green technology<br /><br />To cope with the slump, Toyota has made sharp production cuts across its 74 global assembly lines, laid off about 6,000 temporary workers in Japan and sharply cut pay for its managers. It has so far held off from laying off permanent workers, who enjoy lifetime employment guarantees. Toyota is counting on its third-generation Prius hybrid, which will be unveiled this month in Japan, to buoy sales. But the automaker faces stiff competition from its Japanese rival, Honda Motor, whose low-cost Insight hybrid is expected to eat into Toyota’s market share.<br />The automaker is also rallying around its founding family, tapping Akio Toyoda, the company founder’s grandson, to replace Watanabe next month.<br />Toyota has said he will focus on “green” technology like hybrids and plug-in electric vehicles. The automaker could benefit from Japanese stimulus efforts. Toyota’s numbers stand in contrast to its smaller rival, Honda, which lost $1.9 billion in the first three months of 2009 but eked out a net profit for the year that ended in March.<br /></p>
<p>The Japanese automaker said it lost ¥765.8 billion, or $7.7 billion, in the first three months of the year – even more than $5.9 billion lost by its American rival, General Motors, in the same period.<br />Toyota blamed its woes on the slump in global demand and a strong yen, which makes exports from Japan more expensive. The devastating numbers from the final quarter of fiscal year contributed to a worse-than-expected net loss of ¥436.9 billion, or $4.4 billion, for the year that ended in March. <br /><br />The automaker warned it would lose another ¥550 billion, or $5.5 billion, this fiscal year. It cut its annual dividend by nearly 30 per cent, its first cut to the dividend in at least 15 years. <br />“It will take more time before the financial markets in the US and Europe normalise and the global economy recovers,” Toyota President,Katsuaki Watanabe said. “We were lacking in scope and speed in dealing with various problems and for that I am sorry.” The deep loss is a stark turnabout from the record profit of ¥1.72 trillion that Toyota booked the previous year. Annual sales slumped 22 per cent, to 20.529 trillion yen. The loss also caps a roller-coaster year for Toyota, which in 2008 dethroned GM in terms of vehicles sold worldwide, a post Detroit-based automaker had held for 77 years.<br /><br />No bankruptcy<br /><br />Analysts say Toyota has strong cash reserves, and is far from bankruptcy that has befallen American carmaker Chrysler and that threatens General Motors. Still, Standard & Poor’s lowered its long-term credit rating on Toyota a notch to AA, third-highest rating, and gave a negative outlook for the company.<br />“Toyota maintains a minimal financial risk profile, characterised by a strong capital structure with massive liquidity,” Standard & Poor’s said. But with auto demand forecast to remain sluggish into 2010, Toyota will likely struggle before it can stage a recovery, S&P said.<br />Toyota’s latest forecast paints a grim picture for the year ahead. Toyota has been hit hard in its biggest market, the US, where sales have plunged and show few signs of recovering. In April, it sold 126,540 cars in the US – a 42 per cent drop from a year earlier – slipping behind Ford, which sold almost 130,000 cars.<br />Toyota has also suffered double-digit percentage drops in Japan as well as in China, where it is losing out to rivals with a wider lineup of smaller cars that have surged in popularity. Toyota has expected its global unit sales to fall about 14 per cent, to 6.5 million vehicles, in the year ending in March 2010.<br /><br />Focus on green technology<br /><br />To cope with the slump, Toyota has made sharp production cuts across its 74 global assembly lines, laid off about 6,000 temporary workers in Japan and sharply cut pay for its managers. It has so far held off from laying off permanent workers, who enjoy lifetime employment guarantees. Toyota is counting on its third-generation Prius hybrid, which will be unveiled this month in Japan, to buoy sales. But the automaker faces stiff competition from its Japanese rival, Honda Motor, whose low-cost Insight hybrid is expected to eat into Toyota’s market share.<br />The automaker is also rallying around its founding family, tapping Akio Toyoda, the company founder’s grandson, to replace Watanabe next month.<br />Toyota has said he will focus on “green” technology like hybrids and plug-in electric vehicles. The automaker could benefit from Japanese stimulus efforts. Toyota’s numbers stand in contrast to its smaller rival, Honda, which lost $1.9 billion in the first three months of 2009 but eked out a net profit for the year that ended in March.<br /></p>