Japan's Toyota Motor Corporation slashed its annual net profit forecast by more than half today, warning the global auto industry faced an 'unprecedented' crisis.
Toyota, vying with General Motors for the title of the world's top car maker, now expects earnings of 550 billion yen ($5.6 billion) in the current year to March, down from the 1.25 trillion yen previously projected.
That would mark a decline of 68% from the previous year - the first drop in Toyota's annual earnings in nine years.
'The financial crisis is negatively impacting the real economy worldwide, and the automotive markets, especially in developed countries, are contracting rapidly,' Toyota executive vice president Mitsuo Kinoshita said. 'This is an unprecedented situation. However, we are already taking measures,' he added.
Toyota said its first-half earnings tumbled 48% to 493.47 billion yen due to a stronger yen and weak global economy. Operating earnings fell 54.2% to 582.07 billion yen as revenue declined 6.3% to 12.19 trillion yen.
Toyota sold 4.25 million vehicles globally in the first half, 51,000 fewer than a year earlier.
The global slowdown has badly shaken Japan's car makers, which in recent years have cashed in on worldwide demand for their smaller and more fuel-efficient cars.
In North America, the epicentre of the global credit crunch, Toyota made a first-half operating loss of 34.6 billion yen, while profits in Europe plunged.
