Toyota slashes profit forecast amid global slump at 12:09 AM

Toyota slashed its profit forecast Monday for the fiscal year to barely breaking even at 50 billion yen ($555 million) as Japan's top automaker gets hammered by plunging global demand and a surging yen.

Click here for readmore.......

That's a tiny fraction of its 1.7 trillion yen net profit from the previous fiscal year through March 2008.

"The change that has hit the world economy is of a critical scale that comes once in a hundred years," President Katsuaki Watanabe said at the company's Nagoya office. The drop in vehicle sales over the last month was "far faster, wider and deeper than expected."

Sinking sales in the U.S. in the wake of the financial crisis have dealt a heavy blow to Japanese automakers. But Watanabe said that emerging markets, which had held up in the beginning, were also slowing down now.

The surging yen, which erodes overseas earnings, has battered profits. The dollar has fallen to 13-year lows of about 90 yen recently.

Toyota Motor Corp. - which makes the popular Camry sedan and Prius gas-electric hybrid - now expects to sell 8.96 million vehicles around the world this calendar year, down 4 percent from the it sold last year, Watanabe told reporters.

Unlike previous years, he gave no goal for 2009.

In July, Toyota lowered its global vehicle sales target for 2008 to 9.5 million from the initial 9.85 million. Last year, it sold 9.37 million vehicles around the world.

Toyota also lowered its sales forecast for the fiscal year through March to 21.5 trillion yen ($239 billion), down about 18 percent from its earlier projection at 23 trillion yen ($256 billion).

Grabbing attention in recent years has been whether Toyota would dethrone Detroit-based General Motors Corp. as the world's No. 1 in annual vehicles sales.

But the mood was pure gloom at the president's annual year-end event.

Under a previous revision, Toyota had been forecasting a 550 billion yen ($6.1 billion) profit for the fiscal year through March, less than a third of what it racked up the previous fiscal year and drastically lower than its initial projection of 1.25 trillion yen ($13.9 billion) profit.

Toyota's U.S. vehicles sales plunged by a third on year in November, when overall sales fell to their lowest level in more than 26 years. And there is little hope for a quick recovery as consumers hold back big purchases amid a serious downturn.