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Toyota is forecasting the first drop in its annual profits in nine years, blaming the weak US economy, a stronger yen and rising raw material costs.
The pessimistic prediction came after disappointing fourth-quarter results for Toyota. Its profits in the last quarter of the financial year slumped by 28 per cent, although the Japanese giant is still on course to overtake GM as the world’s top-selling manufacturer.
"The business environment is extremely difficult," Toyota president Katsuaki Watanabe told a press conference. He said that the higher yen and raw material prices would be “major issues” for Toyota. “"We will cut waste and review our ways of doing business," he added.
Toyota’s bad news will raise further concerns in the car industry. If its previously unstoppable progress can be even momentarily derailed, then already-troubled Detroit giants such as General Motors and Ford could be facing further strife.
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