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Toyota again slashes profit forecast amid slump
(Agencies)
Updated: 2008-12-22 19:29 Watanabe and other executives said production expansion plans and other investment will be on hold, including a new plant in the southern US state of Mississippi and new vehicle plans in India, until the global market recovers.
Soaring prices of steel and oil had been a negative for the automakers, but they have fallen back in recent months. Toyota has cut 130 billion yen ($1.4 billion) in costs for the fiscal year, through various measures, said Mitsuo Kinoshita, a Toyota executive. But an unfavorable currency shifts will slash 200 billion yen ($2.2 billion) from its results for the fiscal year through March, while marketing activities eroded another 570 billion yen ($6.3 billion), according to Toyota. Although plans to develop a diesel engine with Japanese partner Isuzu Motors will be stalled, Toyota will continue to invest in hybrids and other ecological technology, the executives said, as a long-term investment for growth. Toyota's US vehicles sales plunged by a third on year in November, when overall sales fell to their lowest level in more than 26 years. And there is little hope for a quick recovery as consumers hold back big purchases amid a serious downturn. While Japan's automakers are in far better financial shape than the cash-strapped American counterparts, the global slowdown is hitting them hard. "The crisis we face now is totally different from past crises," said Watanabe. At a similar news conference last week from Honda Motor Co. President Takeo Fukui, Japan's No. 2 automaker also lowered profit and sales forecast and declined to give a vehicle sales goal for 2009.
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