Toyota Motor, the Japanese motor giant, is set to dive into the red for the first time since 1941 as exports screech to a halt and margins are hammered by the soaring yen.

Toyota’s full year loss – unprecedented since the company stopped making looms and turned its hand to car making – is expected to reverberate throughout Japan.

Toyota's president, Katsuaki Watanabe, said today: “The change that has hit the world economy is of a critical scale that comes once in a hundred years.” Toyota began making cars in the 1930s but only began keeping company record in 1941.

It is the second time in less than two months that the carmaker has lowered its profit forecast and emerges as Japan’s Ministry of Finance revealed a 26.7 per cent annual fall in exports had contributed to the country’s first November trade deficit in 28 years, totalling Y223 billion.

Japanese exports to America fell by their steepest-ever monthly margin – 33.8 per cent.

Perhaps more worrying, said economists, was the 24.5 percent plunge in exports to China and a similar nosedive elsewhere in Asia.

Many Japanese exports around the Asia region are parts or components for assembly in lower-cost manufacturing centres and the fall in exports, as well as Toyota’s warning, points to equally grim export data from Asia’s emerging economies over coming months.

Widely considered to be the best-managed automaker on the planet, Toyota's statement is likely to send a shudder throughout the rest of the car industry.

In what some investors also described as a “devastating” blow to prospects for the entire Japanese economy, the giant automaker said that it would probably book a loss of Y150 billion in the current financial year: a shock contrast, said brokers at Nomura, with the record Y2.2 trillion operating profits logged in fiscal 2007.

“We have lived our whole lives knowing only a situation where Toyota makes money,” said the senior executive of one Nagoya-based car dashboard maker, “this changes our whole world.”

Weighing heavily on those figures is the severity of the US slump: consumers have never stopped buying cars so suddenly and so decisively.

Toyota, along with other Japanese, European and domestic American automakers has seen an unparalleled build-up of inventory – unsold cars are now piling-up as never before.

With about 90 day’s worth of cars in stock, Toyota’s US inventories are now running at around twice the levels considered “appropriate”.

The company said today that the fall in vehicle sales over the last month was “far faster, wider and deeper than expected”, and the slowdown in trade was now spreading from the US into the once relatively strong emerging markets.

Toyota now expects to sell 8.96 million vehicles globally this year, down 4 per cent from last year.

Mr Watanabe also failed to give a sales forecast for 2009.

In the UK, a planned government bailout worth tens of millions of pounds to keep Jaguar Land Rover, the luxury carmaker, afloat has helped its owners to secure last-minute funding.

Gordon Brown had decided to intervene to prevent Jaguar Land Rover's collapse and was preparing to announce a short-term bailout package today or tomorrow.

But a combination of tough rhetoric in public and private reassurance appears to have helped the Tata Group, the Indian conglomerate which owns the carmaker, to secure enough cash to postpone the bailout until after Christmas.

Last week, President Bush announced a $17.4 billion package of emergency loans to aid America's faltering car manufacturers.

America's struggling carmakers were today granted a short reprieve after George W. Bush, the country's outgoing President, pledged to provide the industry with a $17.4 billion (£11.6 billion) bailout.

General Motors and Chrysler, which, with Ford, are known as the Big Three, will initially receive $9.4 billion and $4 billion respectively, which will be drawn from the $700 billion Troubled Asset Relief Program (Tarp).

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