Report: Toyota's slumping sales will lead to first loss ever in U.S.

While most of its rivals all reported significant losses through the first half of 2008, Toyota managed to increase market share to 16.8% and post a $3.8 billion profit for the second quarter. Despite this, both analysts and the carmaker itself are predicting a drop in year-on-year sales volumes for the first time since 1999, and now reports indicate that falling sales in the U.S. will drive the carmaker to post its first-ever operating loss in North America.

Toyota is expected to post a loss of several hundred million dollars in North America for the first half of the current financial year, which ran through the six months leading up to September. Despite the loss on the carmaking side of the books, Toyota's North American operations should still come out with a net profit thanks to the sale of some financial assets, according to Japanese sources Jiji Press and Mainichi Shimbun.

Japan’s Nikkei business daily reported earlier this week that Toyota will post a drop in sales for the current year, with the final tally coming in 2% lower than last year’s total of 8.43 million vehicles. Toyota recently revised its global sales targets for 2008, adjusting the total down from the 9.85 million cars it had expected at the start of the year to a more realistic 9.5 million.

However, it is now hopeful of achieving about 8.3 million sales worldwide. As for the U.S., the carmaker is only predicting 2.45 million sales for 2008, compared to 2007's tally of 2.6 million it sold across its Toyota, Lexus and Scion brands.

While the Toyota brand itself is expected to sell around 8.3 million units, when combined with its subsidiaries Daihatsu and Hino sales are expected to reach 9.3 million units - still around 700,000 less than last year's 9.37 million sales for the entire Toyota group.

The fall in sales this year has been attributed to a combination of factors, although the current credit crunch and recent high fuel prices are claimed to be the main driving forces behind the drop.

Despite its dropping sales, Toyota has not been affected as badly as its competitors. While 2008 may have been the worst year for the carmaker in more than a decade, its market share compared to most of its rivals has not changed and in many cases has actually improved. As one spokesman put it, Toyota now has a larger piece of a smaller pie and that will allow it to build a larger customer base once sales pick up.