Profit Decline For Toyota For The First Time In 7 Years

May 8, 2008 12:57 p.m. EST

Tokyo, Japan (AHN) - Japan's largest auto maker reported a substantial drop in its income, the first profit decline for Toyota Motor in 7 years.

Toyota's net income dropped 28 percent to $3 billion for the fiscal fourth quarter ended March compared to a year ago, according to a statement from the Japanese car maker. Toyota attributed the income reduction to the strong yen and weak sales in the U.S.

Aside from Toyota, other major Japanese vehicle makers including Honda Motor and Mazda Motor, all forecast lower profits for 2008 following the yen's 15 percent appreciation against the dollar for the past 12 months. Toyota President Katsuaki Watanabe said it expects a 6.4 decline in sales this fiscal year.

The difficult U.S. auto market has led to a $3.3 billion first quarter loss for General Motors, but gifted Ford Motors with an unexpected profit of $100 million.

Koichi Ogawa, chief portfolio manager of Daiwa SB Investments in Tokyo, explained to Bloomberg that Toyota's losses are tied up with the slowdown in the U.S. market, which "has yet to hit bottom."