Just a year after making its largest ever profit, Toyota has reported its first group operating loss since 1938 – 3.4 billion euros for the year just ended.
And it is forecasting a much deeper than expected annual loss of 6.4 billion euros for the year through to next March.
The world’s biggest car maker has been battered by a slump in demand for vehicles, particularly in the US and Japan.
Chief executive Katsuaki Watanabe said: “While there are some signs in some countries – such as China and India of a recovery – Europe and the US still need time to recover economically and normalise their financial markets, and therefore we are preparing ourselves, for the foreseeable future, for difficult times ahead.”
To stem further losses, the company is cutting its dividend to shareholders for the first time ever and is looking to reduce fixed costs by 10 percent.
Last year Toyota sold 7.56 million vehicles, 1.34 million fewer than the year before.
A third of its 74 factories worldwide have been put on single shifts, and it is delaying expansion projects until some signs of recovery emerge.