Toyota again slashes profit forecast amid slump

NAGOYA, Japan -- That's a tiny fraction of the 1.7 trillion yen it earned the previous fiscal year through March 2008.

"The change that has hit the world economy is of a critical scale that comes once in a hundred years," President Katsuaki Watanabe said at the company's Nagoya office. The drop in vehicle sales over the last month was "far faster, wider and deeper than expected."

Sinking sales in the U.S. in the wake of the financial crisis have dealt a heavy blow to Japanese automakers. But Watanabe said that emerging markets, which had held up in the beginning, were also slowing down now.

The surging yen has battered profits as well by eroding overseas earnings when converted back to yen. The dollar has fallen to 13-year lows of about 90 yen recently.

This is the second time Toyota has reduced it annual earnings forecast this year. Initially, it had been projecting $13.9 billion profit, but last month it reduced that to 550 $6.1 billion before chopping it further Monday.

Toyota Motor — which makes the popular Camry sedan and Prius gas-electric hybrid — now expects to sell 8.96 million vehicles around the world this calendar year, down 4% from the it sold last year, Watanabe told reporters.

Unlike previous years, he gave no goal for 2009. He also gave no earnings forecast for the following fiscal year, ending March 2010, noting the company didn't have a sales plan yet.

In July, Toyota lowered its global vehicle sales target for 2008 to 9.5 million from the initial 9.85 million. Last year, it sold 9.37 million vehicles around the world.

Toyota also lowered its sales forecast for the fiscal year through March to 21.5 trillion yen ($239 billion), down about 18% from the previous fiscal year. It had earlier projected 23 trillion yen in sales.

Grabbing attention in recent years has been whether Toyota would dethrone Detroit-based General Motors as the world's No. 1 in annual vehicles sales.