DETROIT (AdAge.com) -- Toyota Motor Corp. today warned it will post the first operating loss in its history, citing what President Katsuaki Watanabe called an "unprecedented emergency" and a "crisis unlike crises of the past."
Mr. Watanabe's remarks came at a press conference during which Toyota downshifted its forecast from only six weeks ago for its fiscal year ending March 31. The Japanese automaker is now forecasting an operating loss of $1.7 billion, compared with an operating profit of $28 billion last year.
The company said the more dismal projection was made today "in response to the unexpected degree of the slowdown in the automotive market and the revision of the assumed exchange rates in response to further appreciation of the yen."
Like other automakers, Toyota has cut costs and trimmed vehicle production. Toyota Motor Sales USA cut spending in U.S. measured media by $55 million to $766 million in the first nine months of 2008 vs. the same period a year ago, according to TNS Media Intelligence. Last month, the automaker reported nearly a 70% drop in its second-quarter net profits.
What does that mean for spending? A Toyota spokesman did not return calls by press time. But Wes Brown, VP of industry consultant Iceology, said to look for cuts in 2009, although not as drastic as those expected from Detroit automakers. Toyota, for example, is readying the launch of its new five-passenger Venza model, which will require marketing.
In the U.S., Publicis Groupe's Saatchi & Saatchi Los Angeles, Torrance, Calif., handles the Toyota brand; siblings' Team One, El Segundo, and Zenith Media USA, New York, handles media. Dentsu America's Attik, San Francisco, handles Scion.
Toyota also said today it expects to sell 7.54 million new vehicles globally in the fiscal year ending March 31 vs. 8.91 million in the prior fiscal year. In North America, its biggest market worldwide, Toyota reported it expects to sell 1.04 million new cars and trucks in the current fiscal year, down from 1.30 million in fiscal 2008. Globally, the automaker said it planned to sell 3.92 million new vehicles in fiscal 2009 compared to 4.3 million the prior year.
Iceology expects the U.S. auto market to start rebounding next summer, and when Americans start buying new vehicles again Mr. Brown said Toyota will be among the first automakers to increase ad spending.