NAGOYA (Kyodo) Denso Corp., Japan's largest auto parts maker and an affiliate of Toyota Motor Corp., said Wednesday it is likely to post its first unconsolidated operating loss in nearly 60 years because of the plunge in global auto sales and the yen's sharp appreciation.
The Aichi Prefecture-based company expects a parent-only operating loss of ¥49 billion for fiscal 2008 through March, reversing its earlier projected ¥36 billion profit. It reported a ¥153.58 billion unconsolidated operating profit the previous year.
This will be Denso's first operating loss since the year to September 1950, shortly after its founding, the firm said.
Orders for air conditioners and many other car parts from its main customers, including Toyota and General Motors Corp., tumbled as sales of new cars plunged, mainly in the United States and Europe. The yen's sharp rise is also eroding Denso's earnings.
The third downward revision of operating-balance figures by Denso came after Toyota said Monday it anticipates an operating loss of ¥150 billion in fiscal 2008 instead of the profit of ¥600 billion it previously forecast.
Denso expects to stay in the black in fiscal 2008 on a consolidated basis with operating profit of ¥38 billion. But this is far lower than its earlier estimate of ¥178 billion.