Toyota May Lose 35,000 Units of North American Output
(Corrects percentage of parts from North America and assembly location of Prius, Scion models in the sixth paragraph.)
Toyota Motor Corp. (7203), the world’s largest carmaker, may lose production of an estimated 35,000 vehicles at its 13 North American factories between March 11 and April 25 due to a shortage of components from Japan.
The Toyota City, Japan-based company plans to suspend production on April 15, 18, 21, 22 and 25 at its plants in the U.S., Canada and Mexico, Shiori Hashimoto, a Toyota spokeswoman, said today.
While the carmaker curtails operations in North America, Toyota plans to reopen all its domestic plants on April 18. Nissan Motor Co. and Honda Motor Co., Japan’s second- and third- largest automakers, resumed production at major car assembly plants in Japan today even as overseas output remains limited.
“Carmakers are carefully looking at the supply level of components,” Takeshi Miyao, an analyst at consulting company Carnorama in Tokyo, said by phone today. It’s “highly likely” that domestic output may be halted again because of further supply disruptions, he said.
Toyota fell 2.4 percent to 3,260 yen at the 3 p.m. close of trading in Tokyo. The stock has declined 11 percent since March 10, the day before the earthquake.
Toyota assembles almost 70 percent of the cars and light trucks it sells in the U.S. at factories in North America, and about 85 percent of the parts and materials for those models come from North America. Its Scion models and Prius hybrids are assembled only in Japan.
‘Most Likely Continue’
“Output reduction in Japan and overseas will most likely continue until September,” Kohei Takahashi, an analyst at JPMorgan Chase & Co. in Tokyo said. “Demand in the overseas markets is greater than that in the domestic market, so automakers will prioritize resuming output at their overseas plants.”
Following the March 11 earthquake and tsunami that damaged parts factories in Japan, Toyota has also canceled overtime shifts and weekend shifts at its plants in Europe and Asia.
Toyota relies on North America for about 60 percent of its operating profit, excluding exports, according to the automaker.
Tokyo-based Honda and Yokohama-based Nissan also have reduced output at plants in North America.
In a report published April 8, Citigroup Inc. downgraded Japan’s automobile sector to “sell,” citing the possibility of production cuts lasting beyond April in Japan and overseas. The report also said the industry has not fully addressed the impact on earnings from possible electricity shortages stemming from the damage to a nuclear-power plant in Fukushima.
To contact the reporter on this story: Masatsugu Horie in Osaka at mhorie3@bloomberg.net; Anna Mukai in Tokyo at amukai1@bloomberg.net
To contact the editor responsible for this story: Kae Inoue at kinoue@bloomberg.net
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