Toyota Posts First Loss Since 1950

May 8, 2009

Comments

Toyota has posted its first loss since 1950.

A feature of Toyota’s (TM) rise to the top of the auto world in the past few years was its ability to meet and beat seemingly stiff targets year after year. These days, it seems to be just the opposite. On May 8 in Tokyo, Toyota chief Katsuaki Watanabe marked his final annual results presentation as president by announcing the company’s first loss since 1950. At $4.4 billion, the red ink was worse than the $3.5 billion loss Toyota had projected in February and a massive $21.7 billion less than the $17.7 billion of profit Toyota booked a year ago, before the global financial crisis took hold. “Both revenues and profits declined severely,” Watanabe told reporters.

And things are looking to get worse for the automaker. Despite projected cost cuts of up to $8 billion, losses could rise to $5.5 billion. Sales are down 21% and projected to fall another 20%. However, Toyota has no plans right now to shut down plants.

7 responses to “Toyota Posts First Loss Since 1950”

markm

May 8, 2009 at 1:19 pm

So the pinnacle of manufacturing that produces the worlds highest quality cars and trucks…with no legacy costs and lower labor costs managed to lose more money than a near bankrupt dinosaur manufacturer of nothing but junk SUV’s and cars nobody wants??????????????????????????.

Good for them.
Drew

May 8, 2009 at 1:57 pm

Steve –

I’d be interested in your assessment of a related industry: steel, and its implications for current prospects. As a former participant in the industry I observe that steel is the ultimate GDP product, ( a leading indicator) and that current production is at an anemic level. A level that does not portend any meaningful economic pick up in the near term.

The stock market appeares to have gotten ahead of itself….
PD Shaw

May 8, 2009 at 2:25 pm

markm, I’m not sure which “near bankrupt dinosaur manufacturer” you refer, but G.M. reported a $5.9 billion loss in the first quarter after receiving $13.4 billion in TARP money.
Steve Verdon

May 8, 2009 at 3:08 pm

Drew,

I don’t know about the steel industry. I’m an economist, hence I tend to look at the economy more than individual businesses. That said, I’d look at world wide production and steel production and imports in the U.S. If that number starts going up that might be a good thing, assuming the leading indicator assumption is true.

Mark,

I believe that $4.4 billion is its annual losses not quarterly. This article indicates that Ford lost $14.8 billion annually and that is the better of the “Big Three”. This article indicates GM lost $6 billion in the last quarter which fits nicely with PD Shaw’s number.

The company’s seventh-straight quarterly loss compared with a $3.3 billion net loss a year earlier and added to $82 billion in cumulative annual losses since 2004.–Link

Toyota is doing quite well, comparatively speaking.
markm

May 8, 2009 at 4:36 pm

markm, I’m not sure which “near bankrupt dinosaur manufacturer” you refer, but G.M. reported a $5.9 billion loss in the first quarter

GM posted a $6 billion dollar quarterly loss. Toyota just lost $7.7 billion for the quarter..ats allz i’m sayin’.

Now, I know GM took bailout money but I am not clear how that factors in. Is the $6 billion quarterly loss for GM really $19.4 billion then?. If so, I didn’t know that and stand corrected (and why is it not reported that way).

While on the subject…the banks that were on their death bed that recieved Fed funds then a couple of months later reported profits…was that the same thing?. Was the profits they showed nothing but the bailout money hitting the books?.
PD Shaw

May 8, 2009 at 5:31 pm

I confess that I’m a little confused about the numbers, which googling around comes up with different figures ($6.9 billion quarterly loss for Toyota?)

But my main point was that G.M. had a revenue stream of $13.4 billion in TARP money. If Toyota had that kind of revenue, it would have kicked G.M.’s behind. It’s not intended to be a politically loaded observation.
Steve Verdon

May 8, 2009 at 6:27 pm

GM posted a $6 billion dollar quarterly loss. Toyota just lost $7.7 billion for the quarter..ats allz i’m sayin’.

Try here.

For the year the total losses for Toyota is down about $4.4 Billion. For the fourth Quarter the losses for Toyota were $7.7 billion. The fourth quarter losses are partially offset by profits from the first part of the year.

Based on General Motors last 10k they appear to have lost $30.9 billion in 2008.