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Toyota Tumbles With Everyone Else

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Yes, even the seemingly bullet proof auto makers have stalled.

This morning, Toyota reported abysmal third quarter results and warned that it's heading toward its first annual loss since 1950.

Think about that. For the last 57 years, this company has been profitable and growing.

Even last year, the company made $18.8 Billion in profit. But since then, Toyotas business has plunged.

Look at how much things have slowed down.

  • Toyota lost $1.8 Billion in the third quarter.
  • Toyota warns it could lose $3.8 Billion this fiscal year.
  • Toyota's will build 1.42 million FEWER vehicles this fiscal year.

Believe me, I could go on and on with more stats showing just how much tough things have become for Toyota.

What's gone wrong? Certainly the fall off in sales in the U.S. and Europe are huge, but the exceptionally strong yen combined with Japan's slowing auto market are also squeezing the world's largest auto maker.

Things are so slow in Japan, Toyota has idled all but one assembly line in that country.

The bottom line: Toyotas weak numbers confirm just how brutal the economy is in the U.S. and around the world.

People are putting off buying a new car or truck for a whole host of reasons. I've had people e-mail me and say, "See, this shows that it's not just the Big 3 who are struggling." True. Toyotas troubles also should not absolve Detroit for the mess it finds itself in right now. There are many steps the Big 3 could and should have taken in recent years that could have better prepared them to ride out an economic storm, but that's water under the bridge now.

The question is which auto companies will survive the global car contraction?

Will the Big 3 make it? Will only two get through?

Toyota has the finances and flexibility to ride this out, but even the strongest of the Japanese auto makers is finding out just how rough the worldwide recession has become.

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