Toyota is bracing itself for its first annual earnings decline in eight years as US sales of its cars and trucks fall, raw material costs soar and the value of the yen surges.

In a bleaker-than-expected forecast for the fiscal year to March, the world’s most profitable big carmaker said it expected its net profit to fall by 27 per cent to Y1,250bn ($12bn). This would follow a cheerless final quarter to its last fiscal year during which the company said earnings fell by 28 per cent.