According to a statement issued on May 8 by Katsuaki Watanabe, president of Toyota Motor, the company will likely report its first drop in annual profits in nine years due to the slowing American economy.

The situation will speed the company's shift to an emphasis on emerging markets, a trend to be echoed by other Asian automakers. The probably areas of focus will be the Middle East, Latin America, and China.

In terms of sales and profits Toyota is neck and neck with the world's largest car manufacturer, General Motors. Currently Toyota is seeing profit growth in China, Russia, and Brazil that is serving to offset lackluster U.S. sales.

"Our profit structure has become more geographically balanced," said Watanabe in the statement, "with growing contributions from resource-rich countries and emerging countries."

In light of low sales in America, the diminishing dollar, and increasing prices for materials, Toyota predicts a decline in net profits of 27.2% or approximately $12.5 billion for the current fiscal year set to end in March 2009. This situation is a mirror of the projection made in April by Honda of a drop of 15% in its net profit for the fiscal year.

In spite of these concerns, Toyota remains in a highly favorable position when compared to the traditional Detroit companies. Toyota's sales have been bolstered by the brisk consumer interest in the subcompact Yaris and the Toyota Prius, vehicles American companies are working hard to oust from their positions of popularity.