Typically immune from the declining sales that have rocked Detroit's Big Three automakers, Toyota recently said it anticipates its first yearly operating loss in 70 years for the fiscal year ending March 2009.
The losses will have a ripple effect on Toyota's racing program, TRD president Lee White predicted.
"There is probably not anything on this earth here that Toyota is involved with now that is not under some level of review regarding budget expenditure," White said in a national conference call. "That includes everything that we do, everything that TRD does and everything we do around motorsports. There is a review of everything. Certainly if contracts have expired, it's very likely that contracts have not been renewed, or if they are being renewed, they are certainly being renegotiated."
Competitors have long grumbled that deep-pocketed Toyota would outspend the competition in an effort to reach the top of NASCAR. The automaker is entering its third season in the top-tier Sprint Cup Series, where Joe Gibbs Racing drivers gave Toyota 10 victories.
The manufacturer also won 20 races in the Nationwide Series last year.
Toyota has been in NASCAR's Truck Series since 2004, with 51 victories in 125 races. Toyota also won the last three manufacturer championships in that series, including last year's win by Johnny Benson and Bill Davis Racing in the season finale.
But as Chrysler, Ford and General Motors have struggled in this economic crisis -- needing recent emergency government loans to avoid collapse -- Toyota remained relatively healthy. Then came word of the automakers' own losses:Toyota reported that its U.S. sales in December were down 37 percent on the year, a worse drop than Ford's 32 percent drop and GM's 31 percent slide.
Toyota has also decided to suspend production at all 12 of its Japan plants for 11 days over February and March. The last time Toyota Motor Corp. halted production at all its Japan plants was in August 1993, when demand plunged because of a rising yen, and that was for only one day.
White said the declining auto sales are proof that its racing operation can not recklessly spend just to beat the cash-strapped competition.
"Toyota isn't spending more money than others. And if they had more money, they would not spend more money than others," White said. "That is absolutely the culture of our company to not take advantage and be predatory of other people's difficulties. We are under very strict orders and instructions from our company to watch every penny. The idea that we're going to come in and suddenly take advantage of all the other things that are going on in the world are absolutely false."
Asked specifically where Toyota will be cutting, White said he didn't expect any manufacturers to make on-track reductions.
"In my opinion, the four automotive manufacturers ... the last thing that you'll see any of them reduce is cars on the race track with numbers on them competing," he said. "That is what it takes to gain the hearts and minds of the consumer and hearts and minds of the fans. I think you'll see the four manufacturers still out there, still being represented and still have cars going around the race track.
"There are different levels of trying to support that, and Toyota does it primarily with technology, parts and pieces, and engineering support. Those things are all under review."
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