Friday, May 8, 2009

Toyota cuts dividend for first time in last 14 years

The world's biggest automaker, Toyota Motors Corp, announced a loss of $8.6 billion as a result of low sales. TM files a loss of $6.9 billion for Jan-Mar fourth quarter and cuts it's annual dividend. It's the first time that Toyota cuts annual dividend since at least 1994.

The economic market downturn lowers the demand of cars, which pushed Chrysler, an U.S rival to file bankruptcy and hit Toyota badly. It's first-ever operating loss filed by this Japanese giant after a record profit the year before.

Toyota expected its sales to fall around 14% to ¥6.5 billion globally in 2009/10. For capital spending ¥830 billion is reported, which ¥1.3 trillion a year was before. Whereas, Honda Motors Co. (HMC), a domestic rival announced profit with small margin. This is because of their healthy business for motorcycle.

But many other are in the same situation as Toyota is in. General Motors Corp. reported a loss of $6 billion for the first-quarter.

Toyota said that for this financial year, it wants to cut 10% of the fixed cost or approx $5 billion. This will be done by salary cut, work-sharing and other measure. It also plans to cut down the capital spending.

It cuts its annual dividend from ¥140 to ¥100.

1 comment:

Ibne Hanif said...

I have been working in Honda Pakistan. I think all auto manufactures have suffered such losses this year.