Toyota Profit hits five year low: Down 28 percent

Toyota Motor Corp. has seen a huge drop in their profit, the biggest in five years. The world’s second-largest carmaker has blamed poor sales of sport-utility vehicles and trucks, due to high fuel prices.

Toyota has reported that their net income has fallen by 28 percent to 353.7 billion yen or $3.2 billion, shares are now just 112.28 yen a share. The year earlier net income was 491.5 billion yen, or 153.89 yen per share.

According to Bloomberg, Toyota’s operating profit in North America feel by 57 percent, as we mentioned it is the sale of larger vehicles that have seen the biggest drop. Katsuaki Watanabe, President of Toyota Motor Corp. has had to halt the production of Tundra pickups and Sequoia SUVs for three months as a result of high oil prices.

Toyota has always been known for their larger vehicles, where Honda seems to produce smaller and fuel-efficient cars. This has seen an 8.1 percent gain for the automaker.

It is not just Toyota who is being hit with huge profit losses; Ford and GM are two more to add to that list. Automakers are now facing a fork in the road; they now have some tough decisions to make. One thing is certain; they will all have to think about producing smaller fuel-efficient cars.

Fords $100-million profit turns to $8.7-billion shortfall

Ford are reporting an $8.7-billion shortfall, making it their largest quarterly loss ever. This is the result of falling sales of trucks and SUV’s, as more people look to purchase more fuel-efficient cars.

Just three months ago, Ford Motor Co. had reported a first-quarter profit of $100 million, it seems that reality has now come back to bite Ford. The automaker has also blamed this $8.7-billion shortfall in the soaring gasoline prices.

Chief Executive Alan Mulally, has said that Ford will aggressively move toward producing smaller, more fuel-efficient cars. Mulally also added that Ford will have to reduce their costs as well as cutting their workforce. In the first since months of 2008, Ford sold 1.11 million cars; this is down by 14% on the same period last year.

Alan Mulally has said “We continue to take decisive action in response to the rapidly changing business environment,” he said. “The second half will continue to be challenging, but we have absolutely the right plan to . . . begin to grow again for the long term.”

For a full report on this, visit: ABC News

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