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Toyota to make first loss in 67 years


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Watching the news every day at the moment is like "what next?"

 

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Profits at Toyota Motor, the Japanese motor giant, are set to dive into the red for the first time since 1941 as exports screech to a halt and margins are hammered by the soaring yen.

 

Widely considered to be the best-managed automaker on the planet, Toyota's statement is likely to send a shudder throughout the rest of the car industry.

 

In what some investors also described as a “devastating†blow to prospects for the entire Japanese economy, the giant automaker said that it would probably book a loss of Y150 billion in the current financial year: a shock contrast, said brokers at Nomura, with the record Y2.2 trillion operating profits logged in fiscal 2007.

 

“We have lived our whole lives knowing only a situation where Toyota makes money,†said the senior executive of one Nagoya-based car dashboard maker, “this changes our whole world.â€

 

 

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It looks like Japan's exports to Asia are well down, so this is a global thing. So much for "decoupling".

 

The suppliers of Toyota, and other big Japanese companies, work on thin margins at the best of times, so I think it'll hurt them the most. Many are small family firms.

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