Toyota to post first ever operating loss

The Japanese manufacturer has cut its group operating forecast to a loss of $1.7 billion for the year to end-March.

Toyota had made a record operating profit of $25.2 billion last year.

"This is very, very, very bad," Koichi Ogawa, chief portfolio manager at Daiwa SB Investments, told Reuters. "There's a chance they could fall into the red in the next business year as well.

"This is also not just a problem for Toyota. What is good for Toyota is good for the Japanese economy."

Honda, who pulled out of Formula One earlier, had cut its annual profit forecast by 67 percent last month.

Toyota has insisted that it remains committed to Formula One despite the global crisis and team president John Howett said he is not concerned about the situation.

"Clearly I guess everybody, not only motorsport teams but in all sports, faced with the financial turmoil at the moment, is managing their business correctly , but I don't think we are living hand-in-mouth or from day-to-day," Howett told BBC Radio 5 Live.

He is also confident the new cost-cutting measures agreed by the teams will help reduce budgets significantly.

"I think it is a very pragmatic approach that will allow all teams to reduce costs significantly, the DNA of F1 is retained and the intention of FOTA is to continue in the early part of next year once the initial wave of improvements have been introduced to look at further changes," he added.

Formula One tyre supplier Bridgestone also said on Monday that it was cutting its operating profit forecast for 2008 by 24 percent.