Japan's 10 automakers suffered a combined operating loss of JPY 320 billion in fiscal 2008 due to plummeting sales worldwide and the high yen and the situation is expected to grow even worse. Their recently released annual reports marked a sharp contrast from the previous year, when the automakers collectively reported about JPY 4.7 trillion in operating profits on a consolidated basis. The automakers have also forecast a collective operating loss of JPY 1 trillion yen for this fiscal year, according to their reports for fiscal 2008, which ended in March.
In fiscal 2008, seven of the 10 automakers reported net losses including industry leader Toyota Motor Corp. All seven companies posted net profits in fiscal 2007. Only Daihatsu Motor Co, Suzuki Motor Corp and Honda Motor Co which all produce mini vehicles and motorcycles, managed to post net profits last fiscal year. It said that all automakers are adjusting their inventories in hopes for a recovery in the latter half of this fiscal year. However, their fortunes largely depend on a rebound in sales in Europe, the United States and Japan. And so far, there are no clear indications of that happening soon.
In fiscal 2007, Toyota's operating profit was a record JPY 2.27 trillion. However, the auto giant suffered a JPY 461 billion operating loss in fiscal 2008 as consolidated sales dropped by 1.346 million units from the previous year and the Japanese currency appreciated. Nissan Motor Co also suffered an operating loss of 1JPY 37.9 billion in fiscal 2008. Mazda Motor Corp, Fuji Heavy Industries Ltd and Hino Motors Ltd joined Nissan in seeing their operating profits turn into operating losses last fiscal year.
Five other automakers, Honda, Suzuki, Daihatsu, Mitsubishi Motors and Isuzu Motors Ltd maintained operating profits. In fiscal 2008, the 10 companies sold about 2.5 million fewer vehicles than in fiscal 2007. Suzuki alone in fiscal 2008 sold 2.3 million vehicles. As a result of production cuts, more than 30,000 non regular workers in the auto industry lost their jobs in Japan.