Toyota slated to lose $819 million in Q2, and is relieved about it
When a company loses over $800 million in three months and is relieved about it, you know that something bizarre is going on.
Toyota Motor Corp. reported a loss of $819 million from April to June as a result of plummeting sales across the board in the auto industry, a sharp contrast to its performance in the same time span last year when it reported a profit of close to $3.7 billion.
Yet despite the massive loss, the numbers are still smaller than the figure Toyota expected to lose in the full fiscal year that ends in March 31, 2010. Before the numbers for the second quarter of ’09 were released, Toyota was earmarked to lose about $5.8 billion. Thanks in large part to the smaller-than- expected sales loss, the company is now estimating to lose about $4.7billion, which, considering the unusual footing of the industry these days, comes as a welcome sigh of relief for the Japanese car makers.
Toyota’s decelerated sales nose dive was largely due to the unexpected spike in sales the company received in Japan, which came as a result of a program the Japanese government implemented similar to the Cash for Clunkers program in the U.S.
Continued after the jump.
In this specific program, the Japanese government is offering $2,500 in cash to customers who are replacing vehicles that are more than 13 years old. Similar to the CFC, the incentive-based program was created to jumpstart a struggling industry that is on its way to posting a 32-year low of car sales.
Thanks to the ’Cash for Clunkers: Japanese edition’, Toyota is now expecting to sell over 2 million vehicles – a 100,000 increase from its original projection. Again, it may seem like a small figure but considering the times we are in, any increase is a welcome increase, especially when you take into account the fact that the entire global auto industry isn’t doing any better.
Source: Detroit Free Press