Toyota Motor Corp. posted record sales and profits in the 2007 business year ended March 31, 2008, but is likely to suffer a 30 percent decline in operating profit for the current business year (ending March 31, 2009) — its first decline in nine years.
The forecast epitomizes the situation not only for Japanese automakers but also for export-oriented Japanese enterprises in general, who find themselves caught in the swirl of the steep fall in the value of the U.S. dollar against the yen, rising raw material costs and the economic slowdown in the United States caused by the subprime mortgage crisis.
In the 2007 business year, Toyota posted ¥26.29 trillion in group sales, up 9.8 percent from the previous year. Its operating and net profit grew 1.4 percent to ¥2.27 trillion and 4.5 percent to ¥1.72 trillion, respectively. But Toyota's forecast for the 2008 business year is not rosy: a 4.9 percent fall in sales to ¥25 trillion, a 29.5 percent drop in operating profit to ¥1.6 trillion, and a 27.2 percent decrease in net profit to ¥1.25 trillion.