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.