Toyota makes first annual loss

It seems that even the previously untouchable Japanese car makers aren't immune to the current financial crisis threatening the American and UK auto industries, as Toyota posts its first annual loss since 1941.

Insiders are calling the loss an 'unprecedented crisis', with Toyota President Katsuaki Watanabe saying: "the change that has hit the world economy is of a critical scale that comes once in a hundred years."

Toyota estimates that it will post a total operating loss of Y150 billion (around £930m) - a stark contrast to the Y2.2 trillion profit it turned over in 2007. A combination of slumping overseas sales and the soaring Yen is to blame. Investors are describing the news as a "devastating" blow for the Japanese economy, with the ripples felt not only by other car maker across the world, but the entire Eastern economy.

Toyota is estimated to have around 90 day's worth of unsold cars in stock - twice what it considers 'acceptable' - and now joins the legions of other car makers with similar problems; ranging from high volume manufacturers like the American Big Three, right through to specialist, high-end makers.

Toyota expects to sell just under nine million cars this year - down four percent from 2007 - and at present refuses to forecast 2009's sales. The news comes as Jaguar Land Rover is promised "tens of millions" by Indian owner Tata Motors in order to stay afloat, and the beleaguered US Big Three are finally given some respite by the Bush administration in the form of a $17.4bn bailout loan package.

Mark Nichol