Toyota Motor Corp, the world’s biggest automaker, forecast a much deeper-than-expected annual loss of $8.6 billion as sales tumble, keeping dozens of its factories underused.

Toyota booked a $6.9 billion loss for the January-March fourth quarter and cut its annual dividend for the first time since at least 1994, when it changed its reporting period.

The global downturn that has battered demand for cars and pushed U.S. rival Chrysler into bankruptcy, has hit Toyota badly as it went from rapid expansion to overcapacity almost overnight. The Japanese giant posted its first-ever consolidated operating loss last year after a record profit the year before.

While the entire industry is caught in the slump and manufacturers are selling cars that have piled up in stockyards, Toyota has been especially vulnerable due to its exposure to the United States and Japan, where sales have plunged to multi-decade lows. Customers, fearing for their jobs, are putting off big-ticket purchases.

“My first impression is bad. Toyota’s outlook was worse than I had expected. The company expects a really tough time for the first six months,” said Naoki Fujiwara, a fund manager at Shinkin Asset Management.

“I expect the bottom for the auto industry is the April-June period, followed by a slow recovery.

Source/Full Story::  Reuters

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