Toyota's earnings join the misery parade

Toyota (TM), widely considered the best run car company in the world, could not stay clear of the falling global car sales disaster. Today it posted a loss of $7.7 billion for the quarter ending March 31.

The strength of the yen contributed to the problem, but most of the loss was driven by falling light vehicle sales. Toyota is also struggling in the No.2 global car market -- China.

Revenue at Toyota was off 46 percent. For the coming year, Toyota is forecasting unit sales of 6.5 million units, down from 7.57 million last year.

The numbers demonstrate that management and strong products hardly matter in a catastrophic recession. This turns conventional wisdom about the importance of having superior executive talent on its head. Toyota's results are not markedly better that those of Ford (F) BMW, or Honda (HMC) -- even though Toyota is the No.1 car company in the world, a position it gained by making quality cars well-tailored to buyer's needs.

But nothing that Toyota could control in its product line or marketing plan could protect it from tremendous losses. The depression in the car market has leveled the earnings playing field.

Douglas A. McIntyre is an editor at 24/7 Wall St.


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