The global recession has finally caught up with Toyota Motor Corporation, which announced on Monday that it is anticipating a loss of US $1.7 billion for the fiscal year ending in March 2009. It would be the first time in 70 years that Toyota’s annual operating budget ended up in the red.

The figure is especially shocking since Toyota projected a $14 billion profit earlier in the year, and re-adjusted that forecast downward to $6.7 billion as recently as November. It also comes on the heels of eight consecutive year-over-year profit records, ending with more than a $25 billion surplus for fiscal 2008.

Toyota and the other Japanese automakers have maintained an edge over American manufacturers due to a more progressive, long-term business philosophy. Rather than targeting quarterly earnings and profits, Toyota has based its success on planning years, and even decades ahead. Progressive thinking has allowed the automaker to become the world leader in hybrid cars.

But as vehicle sales plunge, even Toyota is not immune to the fallout of the financial crisis. “The environment surrounding us is extremely severe, and we are facing an unprecedented, emergency situation where we have no choice but see an operating loss this year,” said Toyota President Katsuaki Watanabe. Toyota expects to sell 12 percent fewer cars than it had originally predicted. That number is expected to directly translate to a slide in hybrid vehicle sales, which have also suffered due to declining gas prices. Nevertheless, Toyota is standing by its goal of selling 1 million hybrids per year soon after the turn of a new decade.