Toyota (NYSE: TM) was supposed to be the one big car company that could not screw up. It market share, profits, and revenues have been rising for a decade. It has now passed GM (NYSE: GM) as the No.1 car company in the world based on vehicles sold.
But, the Japanese firm says it will loss almost $4 billion in the fiscal year that ends next month. According to the AP, "Toyota sank into the red for the October-December quarter and acknowledged Friday it was heading for its first annual net loss since 1950."Toyota keeps cutting its vehicle sales estimates as it struggles in its home market, the US, and Europe. There is not longer any region where its former rapid growth rate can be preserved.
Because of its success, Toyota's numbers say a great deal about how hard it will be for The Big Three to return to profitability. Each of the American companies is doing poorly in the US, but GM and Ford (NYSE: F) rely heavily on their once-profitable overseas operations to bring in cash. The period when those regions can be counted on as big contributors is over.
The other lesson from Toyota is the the bailout of the US car companies will almost certainly be underfunded based on current plans. If the money that Detroit said it needed comes to about $37 billion, analysts can probably now double that.
Douglas A. McIntyre is an editor at 24/7 Wall St.
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Reader Comments (Page 1 of 1)
4-19-2009 @ 3:04PM
ronatsrl said...
So... The dealers send their money back to Japan, and the salesman send their money back to Japan and the mechanics send their money back to Japan and the parts guys send their money back to Japan and... nevermind....