World financial crisis

Toyota announces first loss in decades

Article published on the 2008-12-22 Latest update 2008-12-22 12:22 TU

Toyota Motor Corp President Katsuaki Watanabe.
(Credit: Reuters)

Toyota will post its first ever operating loss this year as the world economic crisis continues to shake the car industry. The world's biggest car manufacturer which employs more than 300,000 people will cut production and stop investment to help stem losses.

The company, which was founded in 1937, says it is going to reduce production and cut back on investment to combat falling sales and the high yen, which has not helped the its exports.

It is likely to lose around 1.2 billion euros in this financial year and in response plans to halt the launch of a new factory in the US and reduce production in India.

The company has enjoyed healthy profits in recent years mainly due to the success of its hybrid vehicles such as the Toyota Prius, which has been very popular in the US.

This comes at a time when all car manufacturers are feeling the effects of the global financial crisis.

In the UK, the Indian owners of struggling prestige marque Jaguar, Tata Motors, has decided to pump millions of euros into the business.

Jaguar has an immediate cash flow problem and although Tata confirmed they will inject cash, they are still expecting the British government to supplement any bailout.

Over in Russia, Avtovaz, who make the Lada brand, have announced that it will suspend production for the whole of January because of the economic crisis.

The management have reached an agreement with the trade unions and workers will be paid for days not worked.

Renault own 25 per cent of the business, which is the biggest car manufacturer in Russia.