Toyota Motor Corp, the world's second-largest automaker, cut its profit forecast 56 percent as the credit crunch crippled global auto demand and a stronger yen eroded the value of overseas sales.

Net income may total 550 billion yen ($5.6 billion) for the year ending March 31, compared with its May forecast of 1.25 trillion yen. The company earned 1.72 trillion yen last year. The median estimate of 19 analysts surveyed by Bloomberg expected a net forecast cut to 1.04 trillion yen.

Toyota President Katsuaki Watanabe slashed the carmaker's profit goal as higher fuel costs and the credit crunch have pushed industrywide US sales to the lowest level since 1983. Toyota, Japan's biggest carmaker, follows smaller rivals Honda Motor Co and Nissan Motor Co in predicting larger-than- expected drops in earnings.