Toyota expected to announce loss for first time since 1949

TOYOTA is expected to announce its first-ever operating loss this year as car sales slump around the world and a soaring yen eats into earnings.

The Nikkei business daily said Toyota is likely to book ¥100 billion ($1.6 billion) in operating losses for the second half of the current fiscal year.

It would result in Toyota’s first annual operating loss since the company began releasing annual earnings figures in March 1941, according to the Nikkei.

Toyota is also considering cutting dividend payments for the first time since 1949, the Sankei Shimbun newspaper said.

Toyota shares were down in morning trade ahead of the announcement, losing 2.76 per cent to ¥2820.

The global financial crisis has pressed Japanese car makers to downgrade earnings, lower production, cut jobs and pull out of motor sports en masse in the past few weeks.

In the United States, GM and Chrysler – two of the Big Three – are on the verge of collapse, leading the White House to offer an emergency lifeline.

Japanese car makers, which rely heavily on sales overseas, have also been hit by a soaring yen that makes exports less competitive.

Toyota has already announced plans to cut 3000 temporary jobs at its domestic plants, which will lower production in response to worsening sales.

Standard & Poor’s has said it is reviewing Toyota’s long-term credit ratings.

In November, Toyota revised its net profit forecast to ¥550 billion in the year to March, well down from the ¥1.25 trillion previously projected.