Like most things the piecture is not pure balck and white.

Toyota Profits Tumble as Yen Soars
The Japanese automaker's projected earnings are down drastically from last year. And the drop at Toyota is even sharper than at Honda or Nissan
By Ian Rowley


In the auto sector, the bad news just keeps coming. On Nov. 6 in Tokyo, Toyota Motor (TM) announced results that were grim even in comparison to rivals Honda Motor (HMC) and Nissan Motor (NSANY), which recently cut their full-year earnings forecasts and now expect operating profits to plunge 42% and 51%, respectively. Speaking to reporters, Toyota Executive Vice-President Mitsuo Kinoshita said Toyota would make operating profits of $6.1 billion in the fiscal year ending in March 2009, a decrease of 73.6% from a year ago.

Kinoshita, casting blame on the strength of the Japanese yen, slumping U.S. and European markets, and high raw materials costs, said the current plight of carmakers was unprecedented. "The auto market is in a very severe situation," he said. To boost earnings in 2009 and 2010, Toyota has formed an Emergency Profit Improvement Committee, led by CEO Katsuaki Watanabe, which will search for new ways to trim costs and reevaluate the size and timing of all new projects.

Other Japanese automakers are feeling the pain of the currency's rise, too. Addressing the growing concerns, Honda CEO Takeo Fukui on Nov. 6 said the Japanese government should intervene to weaken the yen. "Foreign exchange has to stabilize," Fukui told reporters at the launch of new a minicar for the Japanese market.