Toyota sees wider losses as sales slide By Jonathan Soble in Tokyo Published: February 6 2009 07:27 | Last updated: February 6 2009 08:16 Toyota Motor warned on Friday that its expected loss for the financial year to March would be three times larger than it had previously forecast. The Japanese carmaker, which like its rivals around the world has been battered by the worst industry slump in decades, promised further cost-cutting measures in response, though it ruled out permanent factory closures or “involuntary” job cuts for full-time staff. Toyota now projects an operating loss of Y450bn ($5bn), against an earlier forecast issued in December of Y150bn. As recently as November it had expected to earn a Y600bn profit – a reflection of the swift collapse of global demand in recent months. Toyota warned for the first time that it would fall into a loss at the net level as well, projecting a deficit of Y350bn. A surge in the value of the yen has also hurt its business, although Friday’s revision was due almost entirely declines in sales. Toyota has slashed production, shrunk its contract workforce and cut management pay. It reduced its forecast for vehicle sales this year by a further 220,000 units on Friday to 7.32m and said it was aiming to cut fixed costs by 10 per cent. Toyota last month chose Akio Toyoda, grandson of its founder and a current deputy president, to take over as chief executive in June. Mitsuo Kinoshia, another Toyota deputy president, said on Friday: “We are working to make sure that the last quarter and this quarter are the bottom, so that we can start to rebound next year.” In a sign of the deep uncertainty surrounding the industry, however, Toyota continued to withhold forecasts for sales and production next year. Moody’s has cut its triple-A rating on Toyota’s debt, reducing it to Aa1, and warned that further downgrades could follow. Toyota had been one of the few large companies to hold a top-notch credit rating from all of the three big agencies until Fitch cut its assessment in November. Toyota’s sales fell 4 per cent worldwide in 2008, led by a 15 per cent slide in the US, its biggest market. Conditions have worsened since the financial crisis accelerated in September: Toyota’s US sales have fallen by more than one-third in each of the last three months. Last year the company – which has overtaken an even harder-hit General Motors to become the world’s largest vehicle producer – earned a record operating profit of Y2,700bn.