Toyota sees losses deepening this year

It's starting to embarrass the establishment. How much more can they keep fudging the losses? First it was 4%, then 8. Now they're saying 20%. When did they lose those sales since their other figures were issued at the end of the final quarter? Unless the chickens I've been clucking about are coming home to roost. I'd rather be GM than Toyota at the moment.

May be Toyota is losing money on business other than Automobile. Independent Audit may be necessary to find out the truth but that is not going to happen.

-maybe we should just let Toyota fail? Well that's what they said about GM, Ford, Chrysler.

"It's starting to embarrass the establishment. How much more can they keep fudging the losses?"

Worse yet, how much longer will the US, consumers etal, allow Toyota executives to blame them for their demise ? WTF is this all about ?:

"President Katsuaki Watanabe said the devastating results were caused by “the significant deterioration in vehicle sales particularly in the U.S. and Europe,” the strong yen and the rising cost of raw materials."

A) The "significant deterioration in vehicle sales particularly in the US and Europe" ?

So what about Japan ? And hey, why aren't the Chinese snapping up your products ? And by the way, wasn't it the Americans that warned you back in 2002 to stop flooding the US market with your cars ! Toyotas focus on market share has all but saturated the US market. In short they have over-fished the waters and now want to complain about no more fish. Get real Toyota... you made this mess, stop blaming the US and Europeans !

B) The strong yen ? I've said this before, Toyota and other Japanese makers have enjoyed huge advantages in exchange rates. From the 1970's rate of 258 yen to the dollar all the way through the 90's when the yen consistently held at 130-140. Now the advantage has slightly turned towards the Americans... by 2-5 yen mind you, and Japan is whining like a school yard bully that just got popped ! Cmon Toyota, you been bragging for years about "The Toyota Way"... what's the freakin problem now ? And where has your billions in profits from the past 30 years gone ?

C) The rising cost of raw materials ? What, your competitors don't suffer the same ? Again, this is a non-issue. And if you really want to focus your complaint on rising material costs you can thank the OPEC nations for driving up crude oil prices... thats where your cost increases came from. Oh yes, and lets not forget Japans recent victory at the WTO against the US over steel prices. Seems Japan won the battle but lost the war on that one. The Americans, and the Europeans, turned around and filed against the Chinese for the same thing. The end result... everybody losses !

It seems that Saruzenki knows business better than Toyota's president Watanabe. If I were you I'd call the man and tell him he's got it totally wrong. He'd better listen to Saruzenki. Really...everything the man says........bammmm....Saruzenki knows it better!! But hey....guess why I'm not surprised...;)

saruzenki: Considering that the US has, and still is the world's No.1 economy, I don't think it's odd at all for people to list the US financial and credit crisis as one of the biggest factors behind the global financial crisis, or the poor financial performance of a global company such as Toyota.

Toyota only surpassed GM as No. 1 in global sales last summer, and up until then, GM has been the "schoolyard bully" that you accuse Toyota of being. Just a couple of years back when GM was on top, GM was bxxching to the US Government to WEAKEN the US dollar so Toyota doesn't have an unfair exchange advantage.

Don't worry, the US is still the world's largest economy; but that's why the US carries more responsibility than any other country, so stop bxxching.

Don't get me wrong, your point is well taken. The way I see it, Toyota is a high profile company, who has been laying a lot of people off recently, and they need to "advertise" their losses as much as possible. When they "advertise" their losses, you can bet your bottom dollar they're not going to blame themselves, so they blame the environment.

US sales of Toyota vehicles in 2008 accounted for 32% of Toyota's global sales which is the biggest piece of their sales pie. I actually think Watanabe really wanted to say the losses were caused by "the significant deterioration in vehicle sales particularly in the US", but didn't want to single the US out, so he included Europe. I agree with you that he should have included Japan.

As far as the rising cost of raw materials, we all know that everyone is suffering from this, but again, "Advertising their losses"... they have to say it out loud so they feel better... it's redundant, but nothing to ruffle your feathers over because everybody is saying it.

saruzenki -- Great post. Unfortunately, this article does not report Watanabe's full remarks. And, he did admit that Toyota was way too slow to respond to changes in the market, cut costs, etc. in their quest for growth. But, still blaming the U.S. is easy and popular, so that's why its reported here. A logical question would be: Since Toyota has over 40% share here in Japan, why didn't they try some innovative things to get folks here to buy more cars, rather than relying on the U.S. for growth? The average person here now trades their car only like once every seven or more years, and the market has shrunk every year for over a decade. Why was Toyota asleep on that? Oh, that's right, because it was easier to sell cars to Americans, who rely on credit, every three years or so, but them blame those same Americans when credit dries up.

Tahoochi; you have some interesting points that need responding to.

"Considering that the US has, and still is the world's No.1 economy,"

Red herring in this discussion. Having the worlds #1 or #2 economy doesn't mean those markets can't become saturated with certain products. This is what has happened as the Koreans, of late, and the Japanese have done over the past 15 years. Japans export driven strategy and emphasis on market share has doomed the US market, plain and simple.

"GM has been the "schoolyard bully" that you accuse Toyota of being. Just a couple of years back when GM was on top, GM was bxxching to the US Government to WEAKEN the US dollar so Toyota doesn't have an unfair exchange advantage."

Bxxching or speaking the truth, especially when GM products were being unfairly criticized by various Japanese media outlets... like ??? Hmmm, Japantoday maybe ? In addition, that unfair exchange rate lasted a good 30 years ! Sure as heck didn't take Toyota long to throw in the towel and cry foul over exchange rates no did it ! More respect seems due to GM, Ford, and Chyrsler for keeping mum for so many years and just nutting up.

"I actually think Watanabe really wanted to say the losses were caused by "the significant deterioration in vehicle sales particularly in the US", but didn't want to single the US out, so he included Europe. I agree with you that he should have included Japan."

Maybe it's my sports background in me but I learned to never criticize the competition for losing. Focus on your own team and what you can do to improve. This is an all too common response from Japanese business executives and sports figures alike... blame the other guy. I for one would love to see a survey as to how Americans feel about being targeted for the huge losses at Toyota. After all Americans have been Toyotas best customers for years... my how the worm has turned. Totally classless act to blame your customers because they don't want to buy your products... stupid Americans !

Saruzenki: as herefornow stated, Watanabe has acknowledged Toyota's slow response to changing markets, cost cutting, etc... and I hear what you're saying about focusing on your own team to improve, and criticizing your competition can be counter-productive, but isn't Watanabe just stating which sales regions have taken a beating? He could have said "Sales are down", but that would kind of make him sound like an idiot for stating the obvious.

Anyway, please take a look at this web page for the full Toyota press release, and ALL of their comments. It's an American web site, so you can even see what Americans are saying about this news in the "Comments" section below the article... http://www.autoblog.com/2009/05/08/toyota-hammered-with-7-7b-loss-in-q1/#comments

As for Toyota saturating the US markets with exports, Toyota's high sellers in the US are cars such as the Camry, and Corolla which are made in the US or Canada (A lot of their other high sellers as well. ie.Sienna, Rav4, etc). When their exports do well in the US, they transplant production of that model from Japan to the US which only makes sense logistically. So I don't think it's an "Export driven strategy" as you say.

Also, although Toyota surpassed GM in global sales, their focus is on GLOBAL MARKET share, and not on US MARKET share. There's a big difference there because the GLOBAL MARKET is exactly that, it's global and up for grabs, whereas the US domestic market is a place where Toyota in my opinion does NOT want to be no.1 above GM, and prefers to be no.2 for many reasons including political reasons.

I for one would love to see a survey as to how Americans feel about being targeted for the huge losses at Toyota.

If that's the way you take Watanabe's comments, then there's not much I can say, but I think you're reading a little too much into a few short quotes made by this article. Again, you can see the whole press release, and comments made by some Americans on the web page I mentioned above.

Costs to make these vehicles are higher, Toyota doesn't want to raise prices because they think it will make them uncompetitive vs the competition at this point in time.

If you have a high quality product that consumers trust they will pay more for the value.

If Toyota raises prices the others will follow saving the market.

Move the large more expensive vehicles and into affordable, smaller ones. The days of 50% of the vehicle market being over 30k$ (Suvs) are gone -maybe a 15%-20% market. People also believe gas prices will go up again.

"Toyota sees losses deepening"

Welcome to the club!

Toyota can got to hell! For too long they thought they were superior to the rest of the automotive world, ever try buying a car from them?? Almost impossible to get a good discount! Go to Nissan, Mazda etc..and you will get nice deals, so my crocodile tears go out for Toyota who is spread around the world too thinly and now it is time to pay. (Too much of a hurry to be seen as part of the BIG 3 in the USA and also as 1 of the biggest automakers in the world)

elbudamexicano, let's get this straight!! Discounts...right? Toyota sold far more cars then Nissan, Mazda, Honda, or......you name it!!! Toyota can go to hell?...sure......but they are still the world's No. UNO in car sales! How come? Because they make cars people like. Got it?

Tahoochi ? What inspired this: "I don't think it's an "Export driven strategy."

Surely you jest ! Toyota is a Japanese company based in Japan. They only supply 24% of their vehicles to the Japanese market. The US holds the largest percentage with more than 30% of Toyotas sales going there. The fact that Toyota has opened up branches around the world does not excuse their behaviour, the money they earn world-wide flows back to Tokyo, at least 80% of it. In addition, if exports weren't an issue, why all this concern over exchange rates ? Toyota even tried a reverse program where cars built in the USA were shipped back to Japan, exchange rates "not an issue", hardly. And I have followed this closely on Yahoo and USA Today. Comments are running greatly in favor of the American viewpoint. That Toyota has hurt the US market, flooded the industry, has declined in quality, and has basically sacrificed the health of the whole industry in an effort to be #1. Congratulations !