Toyota expecting first annual loss for 70 years

There is more bad news for the car industry today after Toyota said full-year losses would be three times higher than originally predicted.

The company, which is the world’s largest carmaker, predicted in December it would make an annual operating loss of 150 billion yen (£1.13 billion).

However, the Japanese firm is now forecasting operating losses of 450 billion yen (£3.4 billion) for the 12 months to March amid a slump in demand.

Its loss will be the company’s first loss in seven decades.

The company said global car sales for the year were likely to be 220,000 lower than expected at 7.32 million units. In the previous year, the company sold 8.913 million cars.

Other giants in the industry have suffered and many have slashed jobs and cut hours as a result of slowing demand.

However, Toyota has also been hit by increase in value of the yen, depreciating its overseas revenues.

Earlier this week, Japanese carmaker Mitsubishi said it expected a net loss of 60 billion yen for the 12 months to 31 March, compared with a profit of 34.7 billion yen a year earlier.

Furthermore, Honda, Japan’s second-largest carmaker has shut down its UK plant in Swindon for four months, while Japanese carmaker Mazda announced it is to axe over 500 more jobs in Japan.

This is the latest in a series of bad news for Japan after it was announced today that electronics maker Sharp is slashing jobs due to a slump in demand for flat panel TVs.

The Japanese company is looking to make cost savings of 200 billion yen (£1.5 billion) and will cut 1,500 domestic posts.

Furthermore, Japanese electronics manufacturer, Panasonic, announced this week it is to slash 15,000 jobs worldwide over the next 12 months in a bid to cut costs by 100 billion yen.

The move will lead to the closure of almost 30 plants with 13 of them in Japan. The job losses will result in the loss of around 5% of Panasonic’s global workforce of 300,000.

Last week, Japanese electronics giant NEC, said it was planning to reduce headcount by 20,000.

Sony is also expecting record losses this year, while Japanese electronics and engineering group, Hitachi is to reduce its headcount by 7,000.

In the third quarter of last year, Japan entered its first recession since 2001. The country has been hit by falling exports as global demand for its products has slumped.

Story link: Toyota expecting first annual loss for 70 years