Tokyo - Toyota Motor Corp on Thursday sharply lowered its earnings projections for the current fiscal year because of a rising yen and slowing auto demand in the United States and Europe amid the global financial crisis.

Japan's leading automaker expected operating income of 600 billion yen (6 billion dollars) for the year that ends March 31, down 62.5 per cent from its initial projection in May.

The figure would also represent a fall of 73.6 per cent from the operating income earned the previous fiscal year.

Toyota also forecast net income of 550 billion yen, down 56 per cent from its May estimate and a 68-per-cent drop year-on-year.

Sales were projected at 23 trillion yen, down 12.5 per cent from the previous year.

"Currently, the financial crisis is negatively impacting the real economy worldwide, and the automotive markets, especially in developed countries, are contracting rapidly," Toyota executive vice president Mitsuo Kinoshita said in a statement.

"This is an unprecedented situation," but the company has taken measures to reduce costs and maximize revenues by reviewing production capabilities, he added.

During the first half of the fiscal year, Toyota saw its operating income more than halve from the same period a year earlier to 582 billion yen.

Net income fell by 47.6 per cent to 493.47 billion yen, and sales were down 6.3 per cent to 12.19 trillion yen from April to September.

Global sales dipped 1.2 per cent during the six months to 4.25 million units. Domestic sales were up by 1 per cent to 1.07 million units, but overseas sales were down 1.8 per cent from the previous year to 3.23 million units.

In North America, operating profit plunged 86.5 per cent during the six months to 34.3 billion yen, compared with the same period a year before.

Sales declined 19.5 per cent to 3.95 trillion yen.

In Europe, operating profit fell 87.2 per cent in the April-September period to 8.74 billion yen on sales of 1.78 trillion yen, down 11.7 per cent.

In Japan, operating income decreased 58.4 per cent to 321.7 billion yen on sales of 7.21 trillion yen, down 1.5 per cent.

However, Toyota saw increases in operating profit and sales in Asia.

The company logged operating profit of 137.26 billion yen, up 17.6 per cent, and sales of 1.63 trillion yen, up 8 per cent, it said. (dpa)