Toyota Profit Falls Almost 70%

Toyota Motor Company (NYSE:TM) reported a drop in net profits of almost 70% today.
The company reported a decrease in net income of 47.6% to 493.4 billion yen (US$5.05 billion), and has cut its fiscal year forecast by half. For Japan’s largest car maker by sales, these results mark the lowest quarterly profit since 2002, and are being blamed on slumping sales in markets including North America and a strong yen. Net revenue fell by 6.3% year over year to 12.19 trillion yen. Operating income decreased by 54.2% to 582 billion yen.

These results are the latest in a string of upsets for the global auto industry hit hard by credit problems and the resulting down economy. "This is the toughest (business) environment that we have ever experienced," said Toyota’s executive vice president, Mitsuo Kinoshita, Toyota Motor Executive Vice President, at a press conference.

Toyota has also decreased its projection on operating profit from 1.600 trillion yen to 600 billion yen. This is the first time Toyota has reported an operating profit below the one-trillion-yen mark since 2001.

Toyota has launched a special committee presided over by president Katsuaki Watanabe to explore cost cutting in sales and production.Toyota’s new concept vehicle, the compact iO, is the company’s hope for renewed sales in the coming year.

One expect GM (NYSE:GM) and Ford (NYSE:F) to have sales falling but when the trouble spreads to the Japanese makers like Toyota and Honda (NYSE:HMC), things are tough. This in no way exonerates the domestic makers, it just means their dilemma is slightly less pathetic.