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26 Nov, 2008 13:56

Toyota counts on Russia as sales wilt

The world's biggest automaker, Toyota, which recently lost its AAA rating from Fitch is counting on Russia to save its global business from operating at a loss.

A global consumption slowdown and a more expensive Yen will drag Toyota’s 2009 profit down to $6 billion – a drop of more than 60% from this year’s. Russia – where the carmaker opened a plant in 2007 – is one of the only places where sales should grow, albeit not as fast, according to Tadashi Arashima, CEO, Toyota Europe.

“Russia, with a lot of natural resources and 145 million people living here.  So I think there’s a huge potential in this market.”

But Toyota dealers say they expects new vehicle sales to fall next year, as the economic downturn catches up with Russia. In some of Russia’s regions the automakers’ sales have slumped as much as 30% in November. Fyodor Boldyagin, Official Dealer, in the Krasnodar Region, says credit – or lack of it – is the cause.

“The reasons behind this slowdown are the difficulties with getting car loans and the fear of parting with whatever cash our consumers may be sitting on.”

Toyota has already clipped its sales target for China this year by 100,000 vehicles. If Russia and Brazil sales follow in its footsteps, it could take years for the carmaker to regain its status of a car-making superpower.