Toyota to Resume Output at All Japan Plants After Disruptions From Quake

Toyota Motor Corp. (7203), the last of Japan’s major automakers to announce plans to reopen domestic auto plants after the nation’s record earthquake, will resume output at all local factories on April 18.

Toyota will restart production at about 50 percent of full capacity and continue manufacturing through April 27, said Paul Nolasco, a spokesman for the Toyota City, Japan-based carmaker. The company may briefly halt factories on April 20 and hasn’t decided on a production plan after Japan’s Golden Week holidays in early May, Nolasco said.

Nissan Motor Co. said March 31 it will begin restarting car-assembly plants from April 11, while Honda Motor Co. said the same day it would restart Japan parts production this week and auto plants from April 11. Toyota, the world’s largest carmaker, closed most domestic factories after the 9-magnitude earthquake and tsunami on March 11 damaged parts suppliers and crippled a nuclear power plant, causing power shortages.

“By starting output gradually, Toyota can adjust production as suppliers slowly get back to normal,” said Takeshi Miyao, an analyst at consulting company Carnorama in Tokyo. “There’s still a possibility for Toyota to meet its production target for the financial year.”

Toyota rose 1.4 percent to 3,340 yen at the 3 p.m. close of trading in Tokyo. The stock has fallen 8.5 percent since March 10, the day before the temblor.

Lost Earnings

Toyota has said it lost 260,000 units of production from March 14 to April 8 after closing 18 factories, citing a shortage of electronic parts, rubber and plastics.

The natural disaster may cost Toyota at least 100 billion yen ($1.2 billion) for the fiscal year that ended March 31 and 200 billion yen this year, according to Koji Endo, an analyst at Advanced Research Japan in Tokyo.

The carmaker resumed output of three models at two factories on March 28, prioritizing hybrids including the Prius. Toyota built 3.28 million cars in Japan in 2010.

Toyota may have to slow production after April 27, said Satoshi Yuzaki, an analyst at Takagi Securities Co. in Tokyo.

“It would be wrong to see this as Toyota coming back,” Yuzaki said. “It is highly likely for production to stop again as it will take a while for smaller suppliers to recover.”

Nissan, Honda

Honda aims to restart auto production at half the normal rate next week, after resuming making parts for export plants this week.

The Tokyo-based company has resumed production much faster than expected, Chief Executive Officer Takanobu Ito said today at the company’s quake-damaged research and development center in Tochigi, north of Tokyo. It will take two to three months for the factories to reach full levels of operation, he said.

Honda, Japan’s third-largest automaker after Toyota and Nissan, has lost 58,000 units of production after closing plants, Ito said. The company prefers to help existing suppliers rather than seeking alternative vendors, he said.

The company has no plan to close the research center and has sent 1,500 of 10,000 engineers to other locations, Ito said.

Nissan aims to begin 50 percent operation at parts and auto assembly plants starting from April 11. Its damaged engine plant in Iwaki, northern Japan, will resume output on April 18 as will its car-assembly plant in Tochigi, Nissan said today. Other car- assembly plants will reopen April 11 or April 13, it said.

Honda closed 1.4 percent higher in Tokyo at 2,969 yen. Nissan fell 0.8 percent to 714 yen.

Credit Ratings

Among smaller Japanese automakers, Daihatsu Motor Co., Toyota’s minicar-making unit, still hasn’t decided when it will open two plants in Osaka and Kyoto. the two plants are closed through April 15, the company said.

Production constraints may also weigh on Japanese automakers’ credit ratings. Moody’s Investors Service this week said it may cut Toyota’s credit rating after the quake.

While Toyota’s plants haven’t suffered significant damage, the disaster disrupted the shipping of about 500 types of components, Moody’s said in a statement. Moody’s currently rates Toyota Aa2, its third-highest investment grade.

“Toyota’s financial and operating performance will worsen in the aftermath of the March 11 earthquake and tsunami and the resulting supply chain disruptions,” Moody’s analysts Curt Beaudouin and Robert Young in New York wrote in a report.

Moody’s rates Nissan Baa2, while Honda has an A1 rating.

To contact the reporter on this story: Masatsugu Horie in Osaka at mhorie3@bloomberg.net

To contact the editor responsible for this story: Kae Inoue at kinoue@bloomberg.net

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