Hard times are coming, predicts the world's largest automaker. Toyota - which captured the global sales crown from struggling General Motors during the first half of 2008 - has lowered its global sales forecast for the year, largely because it expects its first annual decline in the critical U.S. market in nearly two decades.

Last year, Toyota officials threw down the gauntlet when they predicted they would sell 9.85 million vehicles worldwide. At the time, most analysts responded by forecasting that would be enough to push the Japanese maker into the No. 1 slot. But no one counted on the slump in the U.S. and the general stagnation in many other developed markets, notably in Europe.

Now, says Toyota, it expects global sales to reach 9.5 million, this year, about 1 percent more than in 2007. But in the U.S. market, the company said in a brief statement, it will suffer its first sales decline in 17 years. When you combine the Toyota, Lexus, and Scion brands, volume is expected to total 2.44 million cars, trucks, and crossovers, compared with 2.62 million in 2007 - and the original, 2008 forecast of 2.64 million vehicles.

Toyota's 6.8 percent sales slump in the U.S. so far this year is complicated by a variety of factors. There's no question it has been hurt by the sudden, sharp decline in the American light truck market. The Japanese maker has ordered a months-long shutdown of its new Tundra pickup plant in San Antonio, and will pull additional production of the full-size truck out of another factory in Indiana. It has delayed the launch of a new plant that was supposed to build the Highlander SUV - but it will add production, there, of the popular Prius hybrid.

In fact, many analysts believe Toyota could be doing better in the States if it had more hybrids and small cars to sell. There are long lines waiting for the Prius in most of the country, and dealers typically sell the hybrid vehicles the moment a shipment arrives from the factory.

The U.S. isn't the only place Toyota is struggling. It is projecting a very small downturn in the home Japanese market for 2008. On the other hand, such slowdowns have been offset by robust demand in key emerging markets, including China, where Toyota has steadily been pushing its way into the top tier of import nameplates.

The cuts keep coming at General Motors. The automaker will eliminate yet another 117,000 light trucks from its production plans for the rest of the year. That's on top of earlier reductions that means GM will shave a total of 287,000 SUVs and pickups from its U.S. total for 2008.

The latest news brings to 1,760 the number of layoffs that will result from GM's cutbacks. The automaker is eliminating shifts at some plants and trimming back elsewhere, it has revealed, as part of a turnaround plan that requires it to trim billions of dollars in costs - and bring production capacity in line with what the sluggish American market is actually asking for.

GM is by no means alone. Ford and Chrysler are also making major cuts in light truck production - reflecting the impact of the gas price crunch. Since the beginning of the year, full-size pickups, in particular, have lost about a third of their market share - a problem complicated by the slump in U.S. housing.

Even import makers Nissan and Toyota are feeling the pinch. The latter Japanese marque has scheduled significant downtime at its Tundra plant in San Antonio, and will pull additional production of that big pickup out of a second factory in Indiana. Nissan is sharply scaling back light truck production, meanwhile, at its own assembly line, in Canton, Mississippi.

While Ford CEO Alan Mulally said he expects some rebound as the economy recovers, he cautioned it is unlikely the big pickup segment will ever reach its former peak.

Ford Motor Co. may have some good news for fans of its long-running Ranger pickup, as well as workers at the company's Twin Cities Assembly Plant in St. Paul, Minnesota. The surge in fuel prices has slammed Ford's full-sized F-Series pickups, long the nation's best-selling vehicle line. But many buyers are simply downsizing to smaller models, like the Ranger, which has seen a reverse in its long, steady market slide.

As a result, sources indicate Ford may give both the Ranger and the Twin Cities plant a reprieve. The factory was due to close next year, and it was not clear if the automaker was going to transfer production of the small pickup elsewhere or simply let it fade into oblivion.

While company officials indicate there's been no firm decision made, the unexpected 2.3 percent increase in Ranger sales have them seriously considering the idea of continuing operations at Twin Cities until 2011. At that point, Ford is expected to introduce an all-new "world" pickup, which it plans to produce overseas.

The Ranger has been a truck that Ford loves to hate. In the youthful years of the Baby Boom, compact pickups were a popular - and often more affordable - alternative to conventional sedans and coupes. But as trucks went mainstream and fuel prices stabilized following the last oil crisis, buyers switched in increasing numbers to full-size models, such as the Ford F-150.

Many competitors, such as Toyota, with its Tacoma, have continued investing in upgrades, but Ford hadn't done much of anything with Ranger since 1998, and the basic technology underneath the pickup's skin dated back another decade.

Ironically, while Ranger may be getting a new lease on life, Ford is slashing production of the F-Series, and according to a report in the Detroit News, it may be ready to pull the plug on the SVT Raptor, a super-high-performance version of the F-150, which was aiming to compete with the largest, HEMI-powered version of the Dodge Ram. Along with Raptor, the paper reports Ford will scrub the 6.2-liter V-8 truck engine that was supposed to power it.

Regular readers of TheCarConnection.com have gotten used to the daily barrage of news and headlines trumpeting the impact of record oil prices on Big Three truck sales. But Detroit makers aren't the only ones feeling the pinch. After delaying the launch of a new plant intended to build its next-generation SUV/crossover, Toyota is facing up to the fact that even its trucks are vulnerable to the slowdown.

The automaker has announced it will slow production in the coming months at two of its already operating U.S. plants. The automaker's factory in San Antonio, the primary source for the Tundra pickup, will see a reduction in line speed, as well as 14 days of shutdown between now and October. Meanwhile, line speeds will also be trimmed at Toyota's Princeton, Indiana, plant, where the automaker has scheduled six days of shutdowns between now and late August.

The automaker will switch to a seven-hour assembly shift at the plants, starting in July. Workers will also put in an hour of training for each shift.

A key to Toyota's success has been to operate its plants at or above 100 percent of straight-time capacity, notes a Wall Street Journal article. The cuts mean Toyota will face the same underutilization issue that has plagued its big Three rivals and will likely lessen, or perhaps eliminate, any profits the automaker could earn at those plants.

Complicating matters, the Texas factory is designed to produce just Tundras, a sharp switch from the flexible manufacturing system Toyota uses virtually everywhere else in its empire.

Toyota has been forced to offer Detroit-level incentives on some of its big trucks in recent months, another sharp detour from its normal practices and a further strain on what it had hoped would be a year of solid profits from the North American market.

Considering current market conditions, which one industry official has described as "watershed," we weren't really surprised to learn that General Motors is putting an indefinite hold on its plans to re-do its next generation of large trucks and SUVs.

By saving an estimated $250 million or more per vehicle, GM can shift resources to its passenger car operations, where sales are actually growing. But it may also simply choose to hang onto some of that money at a time when it is slashing costs wherever possible.

It's also possible that the automaker could eventually bring things back on schedule, since the replacement for big trucks, like the Cadillac Escalade SUV and Chevrolet Silverado pickup, aren't due to market until 2013 - according to a timetable inadvertently released to the public as part of the settlement with the United Auto Workers Union, last autumn.

The current crop of trucks began rolling out in 2006, and have a fair amount of life left in them, though the surge to $4-plus gas has taken the steam out of a segment that once dominated the General Motors fleet.

Part of the challenge for the automaker - which has already announced plans to reduce production and close some of its truck plants - is to predict where the full-size pickup and SUV segments will ultimately settle down at. Few observers expect them to go away entirely. Then, GM needs to decide how those products will fit in with plans increases in federal fuel economy standards.

Whether it decides to retain the current line-up or update them, it's certain that GM will be adopting more fuel-efficient technology, going forward, such as new hybrid powertrains, possibly diesels, and perhaps even more advanced, high-mileage systems.