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Tuesday, December 23, 2008

Toyota Cuts Outlook

Like so many other businesses, Toyota announced that they will need to cut their groups operating outlook due to their first ever annual operating loss. The loss is a result of the crippling worldwide economic downturn. The cut comes half a dozen weeks after chief rival Honda announced a cut to their outlook as well as again a week or so later when they cut once again. 
"This is very, very, very bad," said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments. "There's a chance they could fall into the red in the next business year as well. "This is also not just a problem for Toyota. What is good for Toyota is good for the Japanese economy."
Currently automakers across the world are attempting to deal with a number of crisis' stemming from the global recession and are coming out thiner than expected. In addition to Toyota's operating issues we are well aware of Detroit's big-three's woes and the effect they are having on an already down economy. Many of the large car companies are making cuts on a number of levels including executive benefits and perks as well as cutting contributions and sponsorships. 
It will be interesting to see where the auto-makers find themselves in the upcoming quarter as as well as spring 09'. I will also be curious to see where the United States Congress will come in regarding an economic bail-out in the form of a bridge loan. Only time will tell.