Toyota Profit to Halve, Unit Sales to Drop: Report

Tokyo October 22, 2008; Reuters reported that Toyota Motor plans to say its annual profit will likely halve in the financial year to next March due to a stronger yen and slowing sales amid the global financial crisis, a newspaper reported on Wednesday.

Separately, media said Toyota will post its first sales decline in a decade in calendar 2008 with vehicle sales now appearing likely to drop 2 percent below the previous year's levels, hurt by weak sales in the United States, Europe and Japan.

A company source said earlier this month that the world's largest automaker was considering cutting its earnings outlook because of sluggish global demand and a firmer yen, following a newspaper report that Toyota's profit would fall 40 percent.

But the Tokyo Shimbun newspaper said on Wednesday that Toyota was expecting an even bigger profit drop, saying the automaker's operating profit would fall more than 47 percent to 1-1.2 trillion yen ($10-12 billion) in the year to next March.

That would be below the company's current forecast for a 1.6 trillion yen profit and an average projection of a 1.44 trillion yen profit in a poll of 21 analysts by Reuters Estimates.

The Nikkei business daily and the Asahi newspaper also said Toyota's parent-only vehicle sales are projected to be 8.3 million vehicles in 2008, down from 8.43 million in 2007.

If confirmed by Toyota, the new forecast would mark the second time in about four months that the Japanese automaker has had to lower its global sales forecast.

Toyota had initially targeted sales of 8.84 million vehicles but cut that to 8.5 million in July.

The market took a turn for the worse in September in the United States, Toyota's largest market. Toyota sales dropped 32 percent in the month and it offered unprecedented zero-percent financing to U.S. customers in October.

Including Toyota affiliates such as Daihatsu Motor and Hino Motors, Toyota group sales are expected to be near 9.3 million units. That would be below 9.37 million units for 2007.

The newspaper said the year-on-year decline in sales on that basis would be the first since Toyota began compiling statistics in 1999.

Toyota officials were not immediately available for comment.