Toyota announced they will temporarily close all of their factories in Japan. The plan to shutter the 12 factories for 11 days through February and March is to combat a rising supply of unsold new cars. Eight of the factories make parts and engines, while the other four produce Toyota vehicles.

This will be the second set of factory closures for Toyota. They initially announced a three-day work stoppage for the beginning of the year. Prior to that, Toyota had not made cutbacks on production since 1993.

That closure was for one day only.

"We are coping with a slump in global sales," Toyota spokesman Hideaki Homma told the Associated Press. "Demand in the world auto market is so depressed that every model is falling sharply in sales."

US sales of Toyotas fell by 37 percent this past December, putting it in better position than Chrysler, but worse than GM and Ford. Although many of Toyota's cars for that market are made in the States, roughly 40 percent are made in Japan. Toyota's Japanese sales also dipped by 18 percent in December, and 7.4 percent for 2008.

Also affecting Toyota's revenue is a strong yen and weakened dollar. The currency fluctuation makes U.S.-based purchases of Japanese goods more expensive.

Toyota is set to announce their first annual loss since the company's inaugural year.

Bayerische Motoren Werke AG, Mercedes-Benz and Toyota Motor Corp.’s Lexus division may see U.S. sales of luxury cars plunge again this year, after the financial crisis sparked the segment’s biggest decline in at least two decades in 2008.

Industry sales of the vehicles may fall below 1 million in the U.S. for the first time since 1996 as premium brands drop faster than mainstream models, unlike in previous recessions, said Rebecca Lindland, an IHS Global Insight Inc. analyst. Sales of the premium cars and sport-utility vehicles may slide 13 percent this year after falling 19 percent in 2008, she said.

“If you go to dinner parties, there’s a certain atmosphere of almost fear in the air,” said Jim O’Donnell, president of BMW of North America LLC, which in 2008 had its first U.S. sales decline in 16 years. “People are sitting on the sidelines wondering what’s happening.”

The crisis that started in the housing market spread across the U.S. economy including Wall Street, where many buyers of expensive products are employed. More than 232,000 bankers and brokers have lost their jobs. The meltdown amounts to a $325 billion drag on consumer spending, with luxury goods taking a disproportionately large hit, Goldman, Sachs & Co. estimates.....

Lamborghini Sets Sales Record, Defies Slump With $200,000 Cars

Jan. 12 (Bloomberg) -- Automobili Lamborghini SpA, the Italian sports-car maker whose prices start at about $200,000, posted record sales last year and plans to add dealerships now, defying the industrywide slump that’s draining U.S. rivals.

The automaker sold a record 2,430 vehicles globally in 2008, up 1 percent, after adding 15 dealerships, Chief Executive Officer Stephan Winkelmann said in an interview at the Detroit auto show today. He declined to specify the company’s pretax profit, saying only that it also set records.

Automaker defections may turn into a stampede from the time-consuming, expensive and increasingly obsolete events


NEW YORK (Fortune) -- Are auto shows going the way of manual typewriters, videotape recorders, and Palm Pilots?

So it would seem. This month, Nissan followed the lead of Porsche and pulled out of the annual Detroit auto show this month without ill effects.

And now, General Motors (GM, Fortune 500), Ford (F, Fortune 500), and Chrysler have decided not to exhibit at the biennial Tokyo Motor Show coming up this fall.

The immediate reason is economic. Most automakers around the world are losing money and need to cut expenses. GM confessed that it spent $2 million on the Tokyo show in 2007. That is a lot of money to show your flag in a country where you only sell a couple of thousand cars a year.

But the real reasons for ditching the shows go deeper. The automobile landscape is changing and doing things in familiar ways in familiar places just isn't cutting it any longer.

It required an industry outsider to point this out. One of the first things that caught Bob Nardelli's eye when he got to Chrysler was that the cash-short company was exhibiting its wares at 60 or more shows every year. Does it make sense to haul your new cars around the country so you can exhibit them to customers when your dealers are supposed to be doing that all year long for free?

Besides the direct cost of setting up and staffing exhibits, there is also the executive time consumed with news conferences, entertaining, and general schmoozing. It may be fun for all involved but it doesn't make a lot of sense in the Internet Age.

Frankly, Detroit and Tokyo aren't the centers of the automotive world any longer. The Japanese market has been shrinking for years as economic activity slows and the population ages. And some experts now believe that U.S. car sales won't run much higher than the scrappage rate for the next several years.

If there has to be a domestic auto show, Los Angeles in November - or any time of the year - is lots more appealing than Detroit in January.

The new centers of the auto industry are places like Shanghai and Mumbai. A Chinese company named BYD, for Build Your Dreams, recently announced that it intends to become the world's largest auto company in the next 15 years. That's the kind of chutzpah you don't find in Michigan these days.

From the point of view of hardware, auto shows are already obsolete.

Most of the new models that are unveiled with such ceremony at the shows have turned up on the Internet days or weeks in advance. Meanwhile, face-to-face contact with colleagues, sources and customers is nice but can be done in less frenetic surroundings.

For years, a certain segment of the auto industry has resembled a traveling circus, moving from Geneva in the spring to Frankfurt and Tokyo, or maybe Paris in the fall, and then on to Los Angeles and Detroit toward the end of the year.

It sounds glamorous until you think about spending all your time in overcrowded exhibit halls and then fighting for taxi cabs for overcrowded evening functions. All except the most peripatetic would surely enjoy a more efficient way of doing business.

Aston Martin may violate terms of their banking deals later this year, according to the company's chairman. Aston head David Richards said that although the company has no imminent financial troubles, they may technically breach their bank covenants.

Breaching a loan covenant could be considered a default, triggering a bank's right to demand the full and immediate payment of a loan. If Aston Martin cannot afford the bill, they could declare bankruptcy. Some common terms included in a loan could dictate the company's liquidity and its profitability.

Richards says the current financial crisis is to blame for the situation. Despite saying Aston Martin can weather the storm, Richards' company cut 600 jobs and slowed down manufacturing to match a much decreased demand. Research and development has also been stalled at the firm.

A group of investors, backed by financiers in Kuwait, purchased Aston Martin from Ford for £479 million in 2007. The current situation means the investment team may have to pump more cash in the business to keep it afloat. This comes at a bad time for one of the backers, Investment Dar, which says they need £680 million to refinance short-term debt.

Investment Dar executive vice-president Amr Abou El-Seoud is considering selling up to 20% of the British automaker.

Loans of up to £2.3 billion (US$3.25 billion) have been guaranteed to the automotive industry by the UK government, Business Secretary Peter Mandelson told the UK parliament. The money is meant to help the industry cope with its financial struggles brought on by the credit crunch. It is stressed though that the money is not a bailout but a way to ensure the car industry is as strong as possible in the future. Most of the British motor industry is owned and run by non-British companies and individuals.

Up to £1.3 billion in guarantees for loans coming from the European Investment Bank was approved while a further £1 billion of loan guarantees will be available for investments that are not eligible for support from the EIB. What the automakers require is easier access to vehicle financing for consumers to help stimulate showroom floor traffic again. They also need loans to subsidise necessary job layoffs.

A UK government spokesman said the aid will be "targeted and to ensure that strong viable businesses, which are currently facing difficulty, get the liquidity and short term credit that they need to get through this difficult period."

Last month production output fell to its lowest level in 20 years. It was barely 50 percent of what was produced a year earlier. Production and job cuts have been the order of the day at a number of UK assembly plants as manufacturers like Nissan of Japan and Tata Motors of India (owners of Jaguar and Land Rover) adjust to cope with the slump.

It is stressed though that the money is not a bailout but a way to ensure the car industry is as strong as possible in the future.

Porsche is world-renowned for making some pretty fast vehicles, but even the German sports car maker wasn’t fast enough to outrun the global economic slowdown. The first six months of Porsche’s fiscal year are in the books and things are not looking good.

Porsche announced on Friday that its revenue decreased by 14.3 percent during the August to January period, totaling roughly three billion euros. Not surprisingly, Porsche’s sales are also down, slipping 27.3 percent to about 34,000 units.

Porsche noted that sales of its volume Boxster were down during the first half of its fiscal year, largely due to a new model set to launch next month. The German automaker expects sales to pick back up once the new model hits a number of global markets.

Porsche’s Cayenne saw about a 20 percent drop in global demand, but still managed a rather healthy 16,600 – not bad considering the trend away from large SUVs.

Here in North America, Porsche’s sales dropped from 16,200 dales during the same period last year to 11,850 units this year.

There's no hiding the fact that the global economic downturn has taken a toll on many people but it appears some members of society are taking their anger out on supercars.

First there is the case of this Lamborghini Gallardo Spyder which was torched in Sint-Truiden, Belgium. The roadster along with at least twenty other vehicles was burned by two men outside a local bar on a busy Saturday night. Luckily the criminals were captured after they left their footprints on parts that were kicked off the car prior to being torched.

A loyal WCF reader sent in this picture of a burnt Audi R8 and says that it is just one of several in Dubai that has been set ablaze recently.

In the past, trucks and SUVs were targets of eco-terrorism but the latest attacks on supercars appears to be something altogether different. They're expensive, high profile vehicles with wealthy owners and while there may not be a clear connection between the state of the economy and the recent spike in attacks, owners might not want to park their supercar on the street anytime soon.

Toyota Financial Services has reportedly applied for loans equaling $2 billion (200 billion yen) from the state-backed Japan Bank for International Cooperation. Much of these funds would presumably be used to lend money to new car buyers in the United States, Toyota's largest and most profitable market. If granted, Toyota would join American automakers General Motors and Chrysler on the bailout bandwagon.

Last month, Toyota sold roughly $2 billion (200 billion yen) worth of 10-year bonds at rates much less favorable than what the automaker had previously been accustomed to. That and the aforementioned loan request are actions likely taken to shore up Toyota's falling cash reserves, which some have estimated to be as low as $18.5 billion at the end of January.

It's widely expected that Toyota will post a net loss of as much as $3.5 billion (350 billion yen) for the fiscal year ending in March. This would be the Japanese automaker's first ever operating loss for a full 12-month period, and it further proves how dire the current economic conditions are for all around the globe. Thanks to all who sent this in!

[Source: Bloomberg | Photo by Junko Kimura/Getty]

Yesterday we learned that Toyota's financial arm has applied for a $2 billion loan from the Japanese government. One day later comes word that Honda may follow suit. Honda is reportedly looking to borrow $100 million to loan to U.S. customers. The loan may be necessary due to the lack of money flowing through the U.S. financial market; a situation that is hurting all automakers. The financial markets are definitely hurting Honda, too, as the Japanese automaker posted a 38% sales decline for February versus 2008. Only two models in the Honda portfolio posted gains for the month; the fuel efficient Honda Fit and the new for 2009 Acura TSX. The February sales slide caused Honda to lose 4.6% on the Japanese stock exchange.

While the current global sales slide is hurting even the strongest of the world's automakers, some analysts see the situation improving later this year. Atlantis Investment Research Corp. president Edwin Merner in Tokyo told Bloomberg that he foresees vehicle sales improving by the end of the year, barring a further erosion of the global economy.

[Source: Bloomberg, Photo by FABRICE COFFRINI/AFP/Getty ]

Toyota has already stepped up and asked the Japanese government for a $2 billion loan to shore up its U.S. lending arm, Toyota Motor Credit Corp. We've also heard that Honda may do the same. Add Nissan and Mazda to the list now. The four biggest Japanese automakers will now all likely ask for government loans to help ensure that sufficient credit is available for U.S. customers to purchase their cars and trucks. While all four have seen sales fall less sharply than General Motors, Ford and Chrysler, each is still experiencing historically low sales in their biggest market: the U.S. Fortunately, the Japanese government has a lot of cash lying around, around $1 trillion in a foreign currency stockpile. About $5 billion has been earmarked and can be funneled through the nation's state-backed bank, the Japan Bank for International Cooperation. Only Toyota has officially requested loans, but Nissan, Honda and Mazda have all confirmed they will apply if the money's available.

[Source: Automotive News, sub. req'd | Photo by NICHOLAS RATZENBOECK/AFP/Getty]