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Putting Toyota’s Big Loss In Perspective

If you’ve been paying attention to automotive news in the last week, you’ve undoubtedly heard that Toyota lost an obscene amount of money in the first quarter – $7.7 billion to be exact. Toyota was quick to point out that this loss is against a $3.3 billion profit in the previous three quarters, resulting in a $4.4 billion loss for the 2008 financial year. (NOTE: Toyota’s financial year ends after the first quarter.) Worst still, Toyota anticipates losing about $5.5 billion for the coming year.

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Toyota’s Loss is Big, But Don’t Let Anyone Fool You
Creative Commons License photo credit: Andres Rueda

In other words, Toyota lost a lot of money last year and they’re planning on losing a lot of money this year too. Considering the fact that Toyota hasn’t had an operating loss since 1950, this is a big deal. Toyota has taken sweeping action with tremendous production cuts, cost cutting measures, and most recently announcing that they’re going to fire half of their corporate management team.

However, before anyone starts worrying about “Toyota being the next GM,” here’s some perspective:

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