Toyota Motor, the world's biggest automaker, warned Friday it expects an annual operating loss of 4.9 billion dollars, its first ever, as the economic crisis sends car sales plunging.
But Toyota said it currently had no plans to close plants and it hoped to avoid further job cuts, in contrast to many other major Japanese companies.
The grim results from once-invincible Toyota underscore the depth of the turmoil in the auto industry, which has been battered by the global economic crisis.
Toyota expects an operating loss of 450 billion yen in the financial year to March, three times bigger than it had predicted in December, in a dramatic turnaround from the previous year's record profit of 2.27 trillion yen.
The company forecast a net loss of 350 billion yen, against a previous projection of a 50 billion yen profit.
For the fiscal third quarter to December, the company reported an operating loss of 360.6 billion yen (4.0 billion dollars), against a year-earlier profit of 601.6 billion yen.
“It was really a tough period,” said Toyota executive vice president Mitsuo Kinoshita.
“The financial problems have spread directly to the real economy,” he told reporters. “We cannot tell what will happen for the next fiscal year, but we hope we are now hitting the bottom.”
Toyota posted a net loss of 164.6 billion yen for the third quarter, against a profit of 458.7 billion yen a year earlier. Revenue slumped 28.4 percent to 4.8 trillion yen.
The Japanese giant sold 1.84 million vehicles in the quarter, about 443,000 fewer than the same period of the previous year. It lowered its global sales target for the year to March by 220,000 vehicles to 7.32 million.
Toyota overtook General Motors in 2008 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 moved to lower production, cut jobs and appoint a new president from its founding family in response to its biggest ever crisis.
Toyota aims to cut its fixed costs by 10 percent, but Kinoshita said there were no plans to shut factories and management hoped to limit layoffs.
The company is already shedding about 3,000 temporary workers in Japan as it reduces production.
Toyota has ramped up its production aggressively in recent years to meet brisk demand, particularly for its fuel-efficient cars.
Although it is in much better shape than its US rivals, analysts say that the Japanese giant's rapid expansion left it vulnerable to the current slump in sales.
“Tough times lie ahead for all Japanese automakers as they are unlikely to get through the slump for a few years at least,” said Yasuaki Iwamoto, an auto analyst at Okasan Securities.
“They have to put more and more emphasis on their efforts to develop clean and small vehicles, which will be the main pillar of the industry from now on. Their survival depends on how quickly and effectively they can carry out cost-cutting measures,” Iwamoto said.
Earlier Friday Moody's Investors Service cut Toyota's long-term debt rating from the highest possible “Aaa” to the second-highest “Aa1.” It said the outlook was negative, meaning further downgrades are possible.
With global auto sales slumping, the yen soaring and raw material prices unstable, Toyota “is unlikely to meaningfully improve its operating performance” in the financial year ending in March 2010, Moody's said.
Truckmaker Isuzu, which is part-owned by Toyota, said Friday it expected to post a net loss of 15 billion yen (165 million dollars) for the year to March, against a year-earlier profit of more than 76 billion yen.
