Toyota Expects to Lose $8.6 Billion in '09

Detroit apologists—who sincerely believe that GM was headed for turnaround town when gas prices ascended and the worldwide economic tsunami hit—will take pleasure in the fact that Toyota reckons it’ll spill $8.6 billion worth of red ink on the corporate carpet. No doubt, the Japanese automaker is “struggling” to cope with the loss of one million units from their worldwide balance sheet. During the January to March Japanese fourth quarter, the formerly unassailable automaker got assailed but good, losing $6.9 billion. As we’ve reported previously, the US and Japanese markets are ToMoCo’s big hole, switching from huge profits to equally enormous losses without much of anything in between. As Automotive News [sub] reports, the head of the ailing automaker had a completely different response to the news of his employer’s sinking fortunes than, say, anyone who works for GM. [GM cheat sheet: the secret word is “accountability”.] “Of course the external environment doesn’t help,” Toyota president Katsuaki Watanabe told reporters. “But we were lacking in the scope and speed of dealing with various problems and issues, and for that I am sorry.” So . . . now what?

To return to profit, Toyota must sell more cars or cut costs further, Watanabe said. But he predicted the US market would be around 10 million vehicles industry-wide at best this year, down from 13.2 million in 2008 and 16.2 million the previous year.

Toyota bashers may wish to note the CEO’s hint that de-contenting may be a thing of the present (dinging the brand’s rep for reliability and value-for-money, eventually). But notice the primacy of “sell more cars” in Watanabe’s recipe for a return to greatness. So far, Toyota hasn’t matched Motown’s incentives. What’s the bet someone at Toyota’s keeping a very close eye on the relationship between cost and price and sales and profit? In other words, what they lose in cost, they’ll make up in volume.