TOKYO — The global downturn is threatening the Toyota Motor Company’s most sacrosanct traditions.
Toyota, which expects an operating loss of $3.9 billion in 2008, plans to introduce a new version of its hybrid Prius in May.
Toyota, the world’s largest automaker, said Friday that it expected to suffer a loss this year, thanks to rapidly declining sales around the world, especially in the United States. The company is expecting its first full-year operating loss since 1937 — 350 billion yen ($3.9 billion) — more than double its previous forecast.
The company’s 2008 fiscal year ends on March 31.
It widened its forecast for an operating loss on its main automotive business to 450 billion yen, or $5 billion, attributing the larger loss to both steep declines in global auto sales and strong gains by the Japanese currency, the yen, which lowers the yen-denominated value of overseas earnings.
The global downturn has pummeled global auto sales, but Toyota had appeared somewhat resistant. No longer.
The last time Toyota posted a net loss was 59 years ago, when it operated under different accounting rules. Then, Toyota was in a financial crisis that led to the departure of its founder, Kiichiro Toyoda.
The automaker, which passed General Motors in 2008 to become the world’s biggest auto company, recently named Akio Toyoda, the grandson of its founder, as its president, succeeding Katsuaki Watanabe. Mr. Toyoda will take charge in June, when Mr. Watanabe becomes vice chairman.
In December, Toyota predicted an operating loss for 2008 of 150 billion yen, and said it expected to earn a small net profit, even though most analysts predicted that its operations would end up in the red for the year.
A net operating loss for 2008 would be the first since the company was founded in 1937 as a unit of the Toyoda family’s automated loom company.
Toyota officials insisted Friday that despite the deteriorating forecast, they would maintain benefits that seem to be a part of Toyota’s culture, from lifelong employment to innovations like hybrid designs. For now, Toyota is not planning to cut permanent jobs, although it has eliminated work for some temporary employees. Analysts have been watching closely to see if the company will end its practice of lifetime employment, which it instituted six decades ago.
“Of course, any individual could leave voluntarily, but we will never fire those employees against their will,” Takahiro Ijichi, a senior managing director, told American analysts in a conference call. “We have never done that.”
Toyota said it was still investing in hybrid-electric and compact vehicles and expected to introduce a new version of its popular Prius hybrid sedan in May. At the Detroit auto show last month, the automaker said it would start selling the first dedicated hybrid model in its Lexus luxury brand this summer.
Sales in the United States have dropped by a third in recent months, but the company is planning new product lineups for regions around the world that it hopes will fare better in the tighter economic environment.
“The financial problems have spread directly to the real economy,” Mitsuo Kinoshita, an executive vice president, told reporters. “We cannot tell what will happen next year but we hope we are now hitting the bottom.”
Analysts were not sure that was the case. “Toyota is going to get worse before it gets better,” said Tairiku Sakaguchi, an auto analyst at Shinko Securities in Tokyo. “The question is how quickly they can move to deal with inventory, excess production capacity and other problems.”
On Friday, Toyota said it was pressing forward with an overhaul guided by a special Emergency Profit Improvement Committee, which the company established in November.
Besides cutting costs by 10 percent, the company said it was canceling or postponing the construction of plants worldwide. It has already put off opening its plant in Blue Springs, Miss., that had been scheduled to begin production in 2010. Toyota executives said the factory would not be scrapped.
Toyota posted a net loss of 164.7 billion yen ($1.8 billion) in the three months ending Dec. 31. In the same quarter last year, the company posted a 458.6 billion yen, or $5 billion, net profit.
The company said it was particularly hard hit in North America, traditionally its most profitable market. Toyota said vehicle sales in North America dropped 31 percent during the quarter compared with the same period last year to 521,000 units. The sales decline and losses on interest-rate swaps led to an operating loss of 247.4 billion yen, or $2.7 billion, in North America.
In Japan, its home market, Toyota posted a 164.2 billion yen, or $1.8 billion, operating loss after vehicle sales dropped 14 percent. In Europe, Toyota’s vehicle sales dropped 24 percent, pushing the company to a 43.4 billion yen, or $480 million, operating loss.
The company said it fared better in China and other developing markets, where it avoided a loss despite declining profits and sales. Toyota said its vehicle sales in Asia fell 8 percent, to 222,000 units.
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