Toyota Motor slashed its profit forecast Thursday, warning the global auto industry faces an “unprecedented” crisis as Asian stocks tumbled on fears the US is sinking deeper towards recession.
The Japanese giant became the latest automaker to reveal plunging profits due to the financial crisis, following on the heels of BMW, Nissan and Honda.
Toyota , vying with General Motors for the title of the world’s top automaker, cut its annual profit forecast by more than half after a terrible year so far.
It now expects a 68 percent plunge in net profit to 550 billion yen (5.6 billion dollars) — the first drop 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.”
Elsewhere in the transport sector, European aircraft manufacturer Airbus warned it expects a sharp reduction in new orders in 2009 as the global economy slows.
Amid the gloomy news, Asian stock markets fell heavily. Japan’s Nikkei stock index plunged 6.53 percent even before the Toyota warning, which came after the close of trade.
The drop wiped out gains seen a day earlier on hopes that US president-elect Barack Obama will get to work on fixing the world’s largest economy in the face of the worst financial crisis in decades.
“Now that the event is over, investors are sobering up and looking at the economic gloom,” said Mizuho Investors Securities broker Masatoshi Sato.
Seoul ended with a loss of 7.6 percent while Sydney shed 4.3 percent. Hong Kong shares were down 6.4 percent at midday.
The sharp falls came after the Dow Jones index slid 5.05 percent on Wall Street on Wednesday as investors braced for a gloomy economic ride after the euphoria of Obama’s election victory faded.