Toyota plans production cuts to align with demand

Toyota Motor Corp. will embark on drastic production changes, including big cutbacks on capital spending, after projecting its first full-year operating loss since World War II. Business conditions have deteriorated for Toyota since fiscal 2007, when it scored a record operating profit. Fiscal 2008 group-wide sales are expected to decline by 15% to 7.54 million units. Sales in Japan are projected to fall by 8% to 2.01 million units, with sales in the rest of Asia, excluding China, seen falling by 7%. Net profit is forecast to plunge 97% to ¥50 billion (US$555.7 million). All new production upgrades will be postponed or scaled down and capital spending planned for fiscal 2009 will be reduced by 30% to less than ¥1 trillion (US$11.113 billion). Directors will also forgo their bonuses during the current fiscal year. (December 23, 2008)