It’s widely held, but not widely discussed, that there are benefits to a period of recession.

The theory is that a downturn clears away the commercial dead wood, trims the fat and generally leaves an economy leaner and meaner and ready for recovery.

Even so, it’s a shock to learn that Toyota is one of the automotive companies that have grown perilously flabby over the last nine years of continuously rising sales.

A combination of a fall in Toyota’s global sales by 4 percent and a strengthening of Yen (which, at a 13-year high, has smashed the profitability of models exported from Japan) has completed floored the Japanese giant.

Operating profit is has crashed from 2.27 trillion yen last year to a likely loss of 150 billion yen (£1.13 billion). It’s the first operating loss since 1941 and analysts say that 2009 will be even worse.

The extent to which Toyota has lost its focus – and now its reputation – for having a remarkable grip on high-quality, low-cost engineering is revealed by an extraordinary promise from President Katsuaki Watanabe.

He says he wants to re-make Toyota so it would be profitable with global ‘bottom line’ sales of just 7 million vehicles. "We must change to become more slim, muscular and flexible," he said.

After all the abuse rained down on GM and Chrysler, it’s shock to find that the mighty Toyota is also in the red and floundering with a business model that can’t turn a profit even with global sales of well over eight million vehicles.