Toyota, the world's top auto maker, said its losses were ballooning as global car sales slide.
The Japanese company warned on Friday that its operating loss for the year to end-March would be 450 billion yen ($4.95 billion), three times the loss it had forecast just six weeks ago.
Toyota's sales fell 34 percent last month in the US, its biggest market, and 23 percent in Japan, as recession gripped major economies.
"This is absolutely awful. The earnings situation has obviously deteriorated since last October when the company's stock price plunged," said Yoshinori Nagano, chief strategist at Daiwa Asset Management in Tokyo.
"Hopes for US economic (stimulus) steps have supported the company's stock since then. Still, if something goes wrong on that front, that could batter the stock price once again."
Toyota posted an operating loss of 360.5 billion yen for October-December. The firm has already let most temporary workers go, and could cut full-time jobs in Britain and North America, a company source said.
Predicting further pain for the world auto industry, Moody's Investors cut its credit rating on Toyota for the first time in a decade.
In Europe, world No 2 truck maker Volvo said it slipped to a surprise operating loss in the fourth quarter amid plunging demand and warned that key markets were likely to fall further this year.
Industry sales in Europe this year will drop to 180,000 and 220,000 vehicles from 318,700 in 2008, while sales in North America will be 165,000 to 185,000 trucks after 184,938 last year, Volvo said on Friday.
US parts firms seek aid
Toyota's grim forecast came as US parts suppliers pressed for government aid to save their companies and hundreds of thousands of jobs.
The auto suppliers have requested some $25 billion in assistance, an amount that would double the US government's commitment to the auto sector at a time when sales are at their lowest since the early 1980s.
Bob McKenna, president of the Motor & Equipment Manufacturers Association, warned that the parts industry has been shut off from credit at a time when orders from automakers are shrinking.
Major problems at auto suppliers could quickly cripple or shut down car and truck production.
"Without immediate credit availability, an onslaught of supplier company bankruptcies is inevitable in the coming weeks and months, which would have a devastating, long-term effect on the US economy," McKenna said in a statement.
Delphi Corp, the biggest parts supplier to General Motors Corp, said on Thursday it was seeking court permission to eliminate healthcare benefits for 15,000 salaried retirees. Delphi has been under bankruptcy protection since 2005.
(Agencies via China Daily February 7, 2009)
