Japanese car firm Toyota today lowered its profit forecast for the financial year to barely breaking even.
Japanese car firm Toyota today lowered its profit forecast for the financial year to barely breaking even.
The latest forecast today at 50 billion yen (£370 million) is far lower than its profit of 1.7 trillion yen (£1.27 billion) earned the previous year to March 2008.
President Katsuaki Watanabe told reporters that Toyota - Japan's biggest car maker - now expects to sell 8.96 million vehicles around the world this year, down 4% from the previous year.
Unlike previous years, he gave no goal for 2009.
Japanese car makers have all been hurt by crashing sales in the key markets, including the US, that followed the world financial crisis.
The surging yen, which erodes overseas earnings of Japanese exporters, has also battered their bottom line. The dollar has fallen to 13-year lows of about 90 yen.
Japanese exports plunged a record 26.7% in November and economists warned the mainstay of the world's second-largest economy would tumble further with no recovery in sight for the global economy.
Global consumer demand for cars, electronics parts and other Japanese products have been hit during the downturn.
"Demand is rapidly cooling not only in the United States and Europe but also in Russia and the Middle East, and we are expecting a further plunge in exports as the global economy is deteriorating," said Hideki Matsumura, a senior economist at the Japan Research Institute in Tokyo.
Battered by falling sales and a strengthening yen, major exporters like Toyota and Sony have already announced job cuts and lower profit projections.
Exports suffered their biggest year-on-year drop since the current system of statistics went into effect in 1980. Exports totalled 5.3 trillion yen (£40 billion) while imports fell 14.4% from a year earlier to 5.55 trillion yen (£41 billion), the ministry said.
That resulted in a trade deficit of 223.4 billion yen (£1.6 billion) - the fourth time this year Japan said its imports exceeded exports after January, August and October.
For years, Japan was blasted by its trading partners over its trade surpluses. But now, the global economic slump is turning Japan into a net importer, at least in recent months.
Exports to the United States, the world's largest economy, plummeted by a record 33.8% in November, marking the 15th consecutive year-on-year fall.
Among US-bound shipments, vehicle exports plummeted by 44% in the month, while exports of car parts fell 40% and those of audio equipment was down by 48.2%.
Japan's exports to the European Union tumbled by 30.8%, with vehicle shipments to the region falling by 37.2%, the ministry said.
