Page last updated at 10:03 GMT, Tuesday, 4 August 2009 11:03 UK

Global car sales dive hits Toyota

Toyota showroom in Tokyo, Japan - 19/12/2008
Toyota has suffered from falling demand in the downturn

Toyota, the world's biggest carmaker, made a loss of 77.8bn yen ($818m; £483m) in the three months to the end of June as global car sales slumped.

Revenue slumped by 38% to 3.8tn yen compared with a year earlier, with US car sales down by almost a half.

But it also upgraded its outlook for the rest of the year, saying losses would total 450bn yen, rather than the 550bn yen it forecast previously.

Toyota has cut production, including its UK plants, as sales have declined.

"Although we were able to make certain improvements in fixed cost and cost reduction efforts, the decline in vehicle sales and the appreciation of the Japanese yen had a severe impact on our earnings," said Toyota's senior managing director Takahiko Ijichi.

Car sales totalled 1.4 million units, a fall of 36% compared with a year earlier.

The carmaker sold 407,000 vehicles in Japan, down by 105,000. In the US, it sold 387,000, down by 342,000.

Increasing sales

"My first impression of the results is that they are better than expected," said Tatsuo Yoshida at UBS.

"Sales in Asia exceeded my prediction, while sales in other markets were mainly in line with expectations," he added.

Analysts also said the company could make a quarterly profit by the end of this year.

"Sales and production are likely to increase thanks to government incentive measures," said Kazuyuki Terao at RCM Japan.

"I think the first quarter was the bottom for Toyota and it is likely to return to profitability on a quarterly basis around the third quarter."

Indeed, the carmaker said it expected to sell 100,000 more vehicles this year than it previously forecast, bringing the total to 6.6 million.

Along with all major global carmakers, Toyota has struggled to cope with the massive drop in demand for new cars during the economic downturn.

For the year to 31 March, it made a net loss of 437bn yen, its first annual loss since 1963.

And last month, the carmaker announced a review all of its products in an attempt to revive its fortunes.

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