The latest projection of an operating loss of 150 billion yen ($1.69 billion) in its second downward revision for the year to March 2009 represents a reversal from the previous estimate of an operating profit of 600 billion yen for the year through next March.
Toyota Motor Corp. booked a record operating profit of 2.27 trillion yen in the previous fiscal year. "We are facing unprecedented emergency circumstances," Toyota president Katsuaki Watanabe said at a press conference.
Toyota said it is expecting a net profit of 50 billion yen ($555 million) for the business year through next March, down 90.9 per cent from a previous estimate of 550 billion yen made in November and compared with a net profit of 1.72 trillion yen the year before.
"The change that has hit the world economy is of a critical scale that comes once in a hundred years," Watanabe said, adding that the drop in vehicle sales over the last month was "far faster, wider and deeper than expected."
It also revised downward its group global automobile sales target for calendar 2008 by 540,000 units from the previous estimate in July to 8.96 million units due to slowing demand amid worsening economic conditions, Kyodo news agency reported.
The revised sales target will be 4.4 per cent lower than the previous year when it sold 9.37 million vehicles worldwide, including those of two subsidiaries -- compact car maker Daihatsu Motor Co. and truck maker Hino Motors Ltd.
Toyota, which makes the popular Camry sedan and Prius gas-electric hybrid, also slashed its global production target to 9.23 million units from an earlier target of 9.5 million units.
Watanabe said that auto demand fell not only in the United States, Europe and Japan but also in emerging markets that had been robust, amid increasing economic worries, and that the pace of the slowdown in auto demand was much faster than the firm had expected earlier.
In a further blow, the yen's sharp appreciation against both the dollar and the euro ate into its earnings, prompting the firm to cut its earnings projection for fiscal 2008 just a month after it cuts its original earnings projections.
Unlike previous years, Watanabe gave no goal for 2009 as the global auto industry was keenly watching whether Toyota would dethrone US-based General Motors Corp. as the world's top auto company in annual vehicles sales.
Toyota fell into the operating red for the first time since the automaker began releasing unconsolidated earnings results for the year through March 1941. The consolidated earnings data became available since the business year through June 1983, Kyodo said.
In recent years, Toyota has seen annual global sales growth of around 6 to 8 per cent. Last week, Japan's second-largest carmaker Honda Motor Co. announced its third downward revision to its group earnings forecast for the current business year, slashing its net profit projection by 61.9 percent due to declining global auto sales and a stronger yen.
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