Toyota Announces US Sales Freeze

Japanese car giant Toyota has said it will suspend US sales of eight models of cars, including its top selling Camry, amid a massive safety recall.

The unprecedented move comes a week after the company announced a recall of 2.3 million cars to fix potentially faulty accelerator pedals.

The recall was Toyota's second major alert in four months in the US, its biggest market.

The halt in sales announced on Tuesday means the world's number one carmaker will also freeze production on some models at its plants in the US and Canada.

The company has said it is also considering whether it needs to announce a recall on cars sold in Europe, where the same parts are used in millions of models already sold.

The problem could lead to accelerator pedals sticking in the depressed position, causing acceleration without warning.

Toyota recall: US models affected

Camry – model for years 2007 to present  RAV4 - 2009-2010 model  Corolla – 2009-2010 model  Matrix - 2009-2010 model  Sequoia - 2008-2010 model  Tundra - 2007-2010 model  Avalon - 2005-2010 model  Highlander – 2010 model

The recall is expected to cause major dent in Toyota's earnings, as well as the company's reputation for safety and quality.

It could also undermine its recovery from plunging automotive sales around the world caused by the financial crisis.

The automaker's shares fell 4.3 per cent in Tokyo trade Wednesday following the sales suspension announcement.
Toyota has already forecast a $3.9bn operating loss for the year to March, with a return to profit not expected until well into 2011 at the earliest.

Annual combined North American sales of the eight cars involved in the sales suspension and recall amount to more than one million units.

Bob Carter, Toyota's US vice president, said the company was taking the measures needed to ensure safety and restore confidence among Toyota customers.

"This action is necessary until a remedy is finalised," he said in a statement.

"We're making every effort to address this situation for our customers as quickly as possible."

Quoted from: Aljazeera.net

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Toyota Reports Record Loss

Toyota Motor, the world's largest vehicle manufacturer, has reported a loss of $7.7bn for the first three months of this year, its worst result ever.

The Japanese company's latest fiscal results are a dramatic turnaround after it made a record profit of 2.27 trillion yen last year.

It warned on Friday that its net loss would deepen throughout the year because of the global slump in sales, which have fallen 15 per cent over the past year.

Katsuaki Watanabe, Toyota's president, said the loss was a result of "the significant deterioration in vehicle sales particularly in the US and Europe, the rapid appreciation of the yen against the US dollar and the euro and the sharp rise in raw materials".

The world's biggest automaker also said that net losses would deepen to 550 billion yen for the fiscal year through March 2010.

Toyota has cut thousands of temporary jobs in response to the financial crisis, and its president said more cost cutting measures would be introduced to help the company return to profit.

Robert Wiseman, professor of business at Michigan State University, said Toyota should emerge in good shape in the long run.

"I would expect all global car manufactures to report a loss this fiscal year since car sales are way down," he told the Associated Press.

"What Toyota can do as it waits for the economy to turn around is invest in the next generation of vehicles and work on improving quality control in its production facilities," he said.

quoted from: Al-Jazeera.Net

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Toyota to Cut Down Investment in India

New Delhi The world’s largest carmaker Toyota is taking a series of cost effective measures for bringing down its planned investment of Rs32 billion, slated for rolling out its small car in India.

The company, which operates in India through a joint venture with Kirloskar Group — Toyota Kirloskar Motor (TKM), had last year announced that it would invest Rs32 billion for launching a ‘strategic’ small car by 2010 from its upcoming second plant, being constructed near its first facility in Bangalore.

“We are continuously working on reducing cost by bringing in lots of value engineering for rolling out the small car. I hope the investment will come down and I am sure it will,” TKM managing director Hiroshi Nakagawa said.

Softening of steel prices, which was high when the firm announced the project, in recent months would also result in low input costs, thereby bringing down the total investment in the plant, he added.

The company would also increase the localisation content in its products in the view of depreciation of Indian Rupee compared to Japanese Yen.

“Currently Indian rupee is very weak, while Japanese Yen is very strong and it is bad for our operations. The counter measure is very clear and it is to increase localisation ratio,” Nakagawa said, adding initially the small car would have about 75 per cent of localisation of components, which TKM would try to increase up to 100 per cent in the future.

He, however, declined to give any financial projections on how much the investment would come down due to these steps.

The company would also explore various overseas markets to export the upcoming small car.

“We will try to study other countries for exporting the small car as a completely-built-unit (CBU) from here. If it succeeds, then we will try the same with other models also,” Nakagawa said.

Asked if TKM was facing any difficulty in funding the project due to economic downturn witnessed worldwide, Nakagawa said: “Our parent, Toyota Motor Corp, was affected very much in the US, Japan and European countries. It is a very tough period in terms of finance in the global operations, but we have a brilliant future in India. We are on schedule and going ahead with our plans to launch the car.”

Besides, TKM was contemplating to increase sourcing of components from India to Toyota’s Japan and Thailand units to reduce operational costs of its parent.

quoted from: Oman Tribune

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Toyota Gives $5bn Loss Warning

Japan's Toyota Motor Corp, the world's biggest car manufacturer, has said that it faces an operating loss of almost $5bn for the fiscal year to March.

Announcing its latest quarterly results on Friday, Toyota said its expected its full-year loss would be now be three times what it had forecast just six weeks ago.

If confirmed the yearly loss would be the biggest faced by the company in its 70-year history.

For the latest quarter alone, from October to December 2008, Toyota said it saw an operating loss of $3.97bn, with little sign that the market is anywhere near recovering.

It released its latest earnings data after the close of Friday's trade on the Tokyo stock market.

Sharp downturn

For the year to March, Toyota officials said they are now predicting a loss of 450bn yen ($4.95bn), a sharp downturn from the 150bn yen loss forecast in December.

Toyota's operating profit stood at 2.27 trillion yen ($24.98bn) a year earlier, but it is now struggling to cut production after years of building new plants to keep up with demand.

Like other Japanese car manufacturers, Toyota has been hit hard by the twin effects of the global slump set off by the US financial crisis combined with the rising value of the yen which has reduced overseas earnings.

Toyota shares have lost about half their value over the last year amid a plunge on the Tokyo stock market.

Plunging sales

Toyota replaced General Motors Corp for the first time in global vehicle sales, a position the American company had held for 77 years.

General Motors posted an 11 per cent drop in sales for the year, while Toyota sales fell four per cent.


Car manufactuers around the world are enduring one of the worst periods in the history of the industry.

Consumers are shunning showrooms asd the fallout from the credit crunch and increasing job cuts takes its toll.

In anticipating the projected loss, Moody's Investors gave Toyota a negative rating outlook, saying the downgrade was "driven by the significantly impaired state of profitability".

Since its previous forecast in December, Toyota has announced additional reductions in production plans, but analysts say even those may not go far enough.

"The drop in global demand is growing more serious," Shinya Naruse, auto analyst with Nomura Securities in Tokyo, said.

"It's difficult to see when things are going to bottom out, and that's why there's no end yet to the rounds of production adjustments.

source: www.aljazeera.com

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