Here’s something to put the gravity of the current situation automotive industry into perspective. After 70 continuous years of profits, Toyota is predicted by some Japanese business media to likely post its first annual parent-only operating loss in 70 years thanks to low sales and the appreciating Japanese yen. It’s last operating loss was in the 1937-1938 financial year, which was also its first year of operation.
Toyota is a company that has remained resilient throughout various recessions in the past. It is a company that can quickly react to market conditions. You only have to look at the big difference between the Toyota Corolla SEG AE101, which some called a “mini-Lexus” and the Corolla AE111 “recession car”, which was a car built during a recession so ended up having many corners cut and designed to be cheap to build.
Some argue that the Toyota Corolla has just not been the same since that turning point but even despite that, it’s just not enough during this period of time which some call the “mother of all recessions”.
But not all Japanese media share these sentiments. Those that are predicting the loss are of the opinion that the second half results will wipe out the profit that Toyota made during the first half of the current financial year. Most of the others agree with the 2nd half losses, but think the profits gained in the 1st half would not be totally wiped out, which would mean a small annual profit.