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At the start of the economic downturn, it appeared as though the major foreign car makers would not feel the same level of pain that American auto makers were feeling, but that has proven untrue, and looking ahead, Toyota does not see the market changing direction any time soon.

Toyota reported its fiscal fourth quarter and full year numbers, and for the full year 2009, Toyota showed a loss of $4.4 billion. To show how much the situation has deteriorated this year, Toyota posted a loss of $7.74 billion for the quarter ended March 31. When American auto makers Ford (NYSE: F) and General Motors (NYSE: GM) first started showing signs of weakness, Toyota seemed like it would be invincible to the economic slowdown.

Toyota has long been a leader in fuel efficient cars, and many thought this was going to give it some sort of immunity to falling demand. Indeed, this time last year we were hearing a lot about high gasoline prices, and fuel efficient cars, but we don't really hear that much about that anymore, and slumping demand has hit all the major auto makers, and Toyota is no exception.

Unfortunately, the Japanese auto maker does not foresee things turning around anytime soon. During fiscal 2009 the company saw a 15.1% drop in vehicle sales to 7.57 million vehicles. Looking at 2010, Toyota is now expecting to sell even fewer autos, stating that its 2010 target is now 6.5 million vehicles. This would mark a pretty hefty 14.1% annual drop.

The other big Japanese auto maker is, of course, Honda (NYSE: HMC). Unlike Toyota, Honda as recently as last week announced that it expects to see a full year profit this year, mainly on the back of its strong motorcycle segment.

The auto industry is clearly still in major trouble. People are just not going to be getting back into the buying mood until we have some clear indications that the overall economy has started to rebound. For now, people are more concerned about keeping their jobs than they are about signing a 5 year auto loan contract.

What are your thoughts on this? Have you purchased a new car over the past 12 months? If so, which brand did you go with, and for those of you considering buying a new car this year, which dealer lots do you anticipate buying your next new car from?