Toyota Motor Corp. said May 8 that it expects a ¥850 billion group operating loss and a ¥550 billion net loss for the year ending next March — its biggest losses ever and its second straight year of red ink — as the global economy shrinks and the yen muscles up against other currencies.

The auto giant said group sales for the year are expected to drop to 6.5 million units from 7.57 million a year earlier.

"We should expect the harsh business environment to continue," Toyota President Katsuaki Watanabe said at a news conference in Tokyo.

"China and India are showing some improvement, but it will take time for the U.S. and European markets to go back to normal," he said.

For the year that ended March 31, Toyota logged a ¥461.01 billion group operating loss and a ¥436.94 billion net loss.