Japan's Toyota Motor Corp. slashed its annual net profit forecast by more than half Thursday, warning the global auto industry faced an
The company said it was reviewing its expansion plans as it became the latest car giant to reveal plunging profits due to the financial crisis, following on the heels of BMW, Nissan and Honda.
Toyota, vying with General Motors for the title of the world's top automaker, now expects earnings of 550 billion yen (5.6 billion dollars) in the current year to March, down from the 1.25 trillion yen previously projected.
That would mark a decline of 68% from the previous year - the first drop in Toyota's annual earnings in nine years.
"The severity of the current situation is like nothing we have seen before," Toyota executive vice president Mitsuo Kinoshita said.
"The global financial crisis has affected the real economy, and the auto markets, particularly in developed countries, are suddenly decelerating."
All business plans under review
Toyota said its first-half earnings tumbled 48% to 493.47 billion yen due to a stronger yen and weak global economy.
Operating earnings fell 54.2% to 582.07 billion yen as revenue declined 6.3% to 12.19 trillion yen.
"This is an unprecedented situation. It is difficult to predict where this will end," Kinoshita said Toyota said its top managers were reviewing its expansion plans in light of the slump.
"Planned factories, existing facilities, new projects; they are reviewing all of them," said Kinoshita. "Capital investment will be lowered significantly."
Toyota sold 4.25 million vehicles globally in the first half, 51 000 fewer than a year earlier.
The global slowdown has badly shaken Japan's automakers, which in recent years have cashed in on worldwide demand for their smaller and
more fuel-efficient cars.
In North America, the epicentre of the global credit crunch, Toyota made a first-half operating loss of 34.6 billion yen, excluding the
positive effect of valuation gains on interest rate swaps.
The loss came despite an increased market share of 17% in the United States, Toyota's biggest yet, said Kinoshita. Profits in Europe