Toyota records $7.7b loss – biggest ever

Toyota records $7.7b loss – biggest ever

toyota logo

Last quarter’s financial news has been fairly brutal for almost all carmakers, but the biggest blow has just come from one of the world’s largest automotive powerhouses. Toyota has posted a last-quarter loss of $7.7 billion USD; the worst loss in the company’s 71-year history and worse than even GM’s recently-reported loss of $6 billion USD. Toyota now expects to lose $5.5 billion USD for the year ending March 2010, surpassing the $4.4 billion USD it lost in the last financial year.

The reasons behind Toyota’s downturn in fortune is a familiar story. Global sales were down 21.9% last year, with the most stark losses occurring in North America and Europe. The Yen also made strengthened 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 coming year.

Even with Toyota’s tremendous struggles, analysts expect it to emerge from the automotive downturn with far less permanent damage than its domestic competitors. Years of multi-billion dollar profits have fortified Toyota’s balance sheet, giving the Japanese automaker good security even in tough times.

To help weather the downturn, Toyota has already laid off thousands of temporary workers worldwide, and it has also offered buyouts to American workers. The company also postponed construction indefinitely on its Mississippi assembly plant. It’s also continued to reduce manufacturing costs, and will likely accelerate those efforts in the coming year.

toyota logo

Last quarter’s financial news has been fairly brutal for almost all carmakers, but the biggest blow has just come from one of the world’s largest automotive powerhouses. Toyota has posted a last-quarter loss of $7.7 billion USD; the worst loss in the company’s 71-year history and worse than even GM’s recently-reported loss of $6 billion USD. Toyota now expects to lose $5.5 billion USD for the year ending March 2010, surpassing the $4.4 billion USD it lost in the last financial year.

The reasons behind Toyota’s downturn in fortune is a familiar story. Global sales were down 21.9% last year, with the most stark losses occurring in North America and Europe. The Yen also made strengthened 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 coming year.

Even with Toyota’s tremendous struggles, analysts expect it to emerge from the automotive downturn with far less permanent damage than its domestic competitors. Years of multi-billion dollar profits have fortified Toyota’s balance sheet, giving the Japanese automaker good security even in tough times.

To help weather the downturn, Toyota has already laid off thousands of temporary workers worldwide, and it has also offered buyouts to American workers. The company also postponed construction indefinitely on its Mississippi assembly plant. It’s also continued to reduce manufacturing costs, and will likely accelerate those efforts in the coming year.

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