Toyota, the world's biggest automaker, forecast a much deeper-than-expected annual loss of $8.6 billion as sales tumble, keeping dozens of its factories underused.
Toyota booked a $6.9 billion loss for the January-March fourth quarter and cut its annual dividend for the first time since at least 1994, when it changed its reporting period.
The global downturn that has battered demand for cars and pushed US rival Chrysler into bankruptcy, has hit Toyota badly as it went from rapid expansion to overcapacity almost overnight.
The Japanese giant posted its first-ever consolidated operating loss last year after a record profit the year before.
While the entire industry is caught in the slump and manufacturers are selling cars that have piled up in stockyards, Toyota has been especially vulnerable due to its exposure to the United States and Japan, where sales have plunged to multi-decade lows. Customers, fearing for their jobs, are putting off big-ticket purchases.
"My first impression is bad. Toyota's outlook was worse than I had expected. The company expects a really tough time for the first six months," said Naoki Fujiwara, a fund manager at Shinkin Asset Management.
"I expect the bottom for the auto industry is the April-June period, followed by a slow recovery.
For the year to next March, the maker of the Prius hybrid car forecast an operating loss of 850 billion yen, more than double the average forecast in a survey of 20 analysts by Thomson Reuters and larger than the 700 billion yen loss predicted earlier on Friday by the Nikkei newspaper.
On a net basis, Toyota sees an annual loss of 550 billion yen.
Toyota said it expected its global sales to fall about 14 per cent to 6.5 billion yen in 2009/10. It forecast 830 billion yen in capital spending, down from 1.3 trillion yen a year earlier.
Toyota reported a January-March operating loss of 682.5 billion yen ($6.93 billion), versus a 396.7 billion yen profit a year earlier and a consensus estimate for a loss of 689 billion yen in a survey of 21 analysts polled by Thomson Reuters.
Its net loss was 765.8 billion yen, swinging from a profit of 316.8 billion yen in the same period a year ago.
Reuters