Blog: Dave LeggettToyota's big one

Dave Leggett | 8 May 2009

Toyota's just announced operating loss for 2008/09 is certainly a big one. But it was expected and serves as a reminder that this recession is hitting everyone.  What is perhaps more worrying is that Toyota has also said its operating loss will double for the 2009/10 fiscal year. The year 2009 may well prove to be the nadir of the downturn, so a bad year this year is to be expected to some extent. But a predicted doubling of the operating loss is a slight shocker. This is Toyota, one of this industry's star performers. We got used to the 'record sales, record profits' results statements over the years.

And Toyota's candid admission means we'll therefore be hearing about a much improved 2010/11 fiscal year Toyota result – assuming industry forecasts for improved conditions in 2010 are correct - in two years' time.

Even if St Pesto (BBC recession supremo Robert Peston) and others are correct in their belief that the banks are now largely over the worst, there will still be plenty of bad news in the pipeline for the global economy and a reforming automotive industry. Unemployment will be rising for a while yet. Companies and households are not exactly on a spending spree. Industrial restructuring is far from finished.

Yes, things at the macro level will be getting better by the end of this year – if for no other reason than there's a stock cycle upturn coming – but don't expect all the news to suddenly be positive.

FEATURE: Auto industry faces age of austerity (2)

JAPAN: Toyota books JPY460m full year operating loss


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