Report: Toyota could lose more that $1b during second half of fiscal year
When the Big Three CEOs appeared before a Congressional board earlier this month, many of the government representatives implied that if Ford, Chrysler and General Motors simply ran their businesses like Toyota, there would be no need for a government bailout. However, a new report indicates that Toyota could be in some hot water of its own, with plenty of red ink staring the Japanese automaker in the face.
According to a report first published by Asahi, Toyota - the poster child for profits within the automotive industry - could lose $1.1 billion during the second half of its fiscal year. In all, the losses from October to March could reduce Toyot's full-year profits by more than 80 percent.
In addition to collapsing sales - Toyot's U.S. sales were down 34 percent last month - the company is also fighting the strong value of the yen. During 2008 the yen gained 23 percent against the dollar and 34 percent against the euro, according to Bloomberg. Because of the strong value of the yen, sales in other regions are shriveling up by the time they return home to Japan.
Toyota announced in November that it expects operating profits for the current fiscal year to decrease by 74 percent, totaling 600 billion yen. That updated prediction was off 63 percent from the automaker's original forecast from earlier in the year.