Toyota Motor slashed its annual profit forecast by more than half on Thursday, in a sign of how the global economic slowdown has slowed the Japanese auto juggernaut.
Japan's largest automaker also reported net profit in the three months ended Sept. 30 dropped by more than two-thirds, hurt by slowing demand, a tightening of car loans amid the global credit crunch and a stronger Japanese currency.
The steep declines, larger than those forecast by most analysts, threaten eight straight years of annual profit growth at Toyota, once the envy of the world car industry. It also cast into stark relief how America's economic contagion has infected automakers around the globe, hurting sales even in once fast-growing markets like India and China.
Toyota said it now expects net profits of ¥550 billion, or $5.5 billion, for the fiscal year ending March 31, 2009, down 56 percent from its earlier forecast of ¥1.25 trillion. It also cut its annual sales forecast by ¥2 trillion to ¥23 trillion.
Toyota said net profit in the July- September quarter fell 69 percent to ¥139.8 billion.
"Frankly, it's very difficult to judge when the environment will stabilize," a Toyota executive vice president, Mitsu Kinoshita, told reporters.
The grim earnings report came just days after Toyota announced that October sales in the critical United States market had fallen 23 percent from last year. The slowdown has hit American rivals even harder, with General Motors reporting a 45 percent decline in the same month.
The global slowdown has struck Toyota just as it finishes rolling out a full lineup of vehicles, including larger eight-cylinder models like its Tundra pickup truck, in a bid to overtake GM as the world's largest automaker.
Thursday's results suggested the slowdown was hurting sales of Toyota's entire lineup, including popular, fuel-efficient models like its hybrid Prius and Camry sedan.
Analysts expect Toyota to react to the slowdown by relentlessly cutting costs and shifting more production and parts sourcing to local markets. The global slowdown has already forced the carmaker to put new factories on hold, layoff workers and offer ever sweeter incentives to entice buyers back into showrooms.
Japan's largest automaker also reported net profit in the three months ended Sept. 30 dropped by more than two-thirds, hurt by slowing demand, a tightening of car loans amid the global credit crunch and a stronger Japanese currency.
The steep declines, larger than those forecast by most analysts, threaten eight straight years of annual profit growth at Toyota, once the envy of the world car industry. It also cast into stark relief how America's economic contagion has infected automakers around the globe, hurting sales even in once fast-growing markets like India and China.
Toyota said it now expects net profits of ¥550 billion, or $5.5 billion, for the fiscal year ending March 31, 2009, down 56 percent from its earlier forecast of ¥1.25 trillion. It also cut its annual sales forecast by ¥2 trillion to ¥23 trillion.
Toyota said net profit in the July- September quarter fell 69 percent to ¥139.8 billion.
"Frankly, it's very difficult to judge when the environment will stabilize," a Toyota executive vice president, Mitsu Kinoshita, told reporters.
The grim earnings report came just days after Toyota announced that October sales in the critical United States market had fallen 23 percent from last year. The slowdown has hit American rivals even harder, with General Motors reporting a 45 percent decline in the same month.
The global slowdown has struck Toyota just as it finishes rolling out a full lineup of vehicles, including larger eight-cylinder models like its Tundra pickup truck, in a bid to overtake GM as the world's largest automaker.
Thursday's results suggested the slowdown was hurting sales of Toyota's entire lineup, including popular, fuel-efficient models like its hybrid Prius and Camry sedan.
Analysts expect Toyota to react to the slowdown by relentlessly cutting costs and shifting more production and parts sourcing to local markets. The global slowdown has already forced the carmaker to put new factories on hold, layoff workers and offer ever sweeter incentives to entice buyers back into showrooms.
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