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Toyota Extends N. American, China Output Cuts to June

(Corrects the date of production in fourth paragraph of story originally published on April 20.)

Toyota Motor Corp. (7203), the world’s largest automaker, extended production cuts at its North American and Chinese plants because of a shortage of parts after Japan’s record earthquake and tsunami last month.

The company’s North American unit said today that plants in the region will continue to be closed on Mondays and Fridays and run at 50 percent on Tuesdays, Wednesdays and Thursdays through June 3. Toyota will also shut U.S. plants for one week starting May 30 and in Canada from May 23. In China, the utilization rate at factories will generally be 50 percent of normal levels and may fall as low as 30 percent from April 21 to June 3, it said in a statement.

“This is not going to be over soon,” said Jesse Toprak, an analyst for Truecar.com, an automotive pricing and data website based in Santa Monica, California. “The impact of reduced production could mean that Toyota’s sales in the U.S. are impacted as much as 10 percent this year.”

Toyota lost production of 150,000 units in North America and 80,000 units in China from March 11 to June 3, said Paul Nolasco, a spokesman for the carmaker. In 2010, Toyota made 1,458,000 units at its plants in North America and 770,000 in China.

Toyota, Honda Motor Co. and Nissan Motor Co. are working to restore full plant operations in Japan and at factories abroad that are running short of parts. Toyota estimates it lost production of 260,000 units in Japan from March 14 to April 8 and 35,000 units of North American auto production this month due to quake-related shutdowns.

Shares in Toyota rose 1.4 percent to 3,170 yen in Tokyo. The stock has dropped 12 percent since the March 11 temblor.

‘Plant Improvement’

Employees at Toyota’s North American plants won’t be laid off because of the production cutbacks, the company said. Workers will use the “non-production time for training and plant-improvement activities,” Toyota said.

“We are trying to continue production as much as possible and keep our workforce intact in order to facilitate a smooth transition back to full production when all parts are available,” Steve St. Angelo, executive vice president for North American production, said in a statement today.

Toyota, which canceled five days of North American output, from April 15 through April 25, said its production plans after June 3 will be decided later. The company’s U.S. sales unit is based in Torrance, California.

“No one knows how long production will remain at about 30 to 40 percent of the usual level,” said Koji Endo, an analyst at Advanced Research Japan in Tokyo. “Customers who are not willing to wait for Japanese vehicles may switch to buying American, Korean and European cars instead.”

To contact the reporters on this story: Alan Ohnsman in Los Angeles at aohnsman@bloomberg.net; Bill Koenig in Detroit at wkoenig@bloomberg.net

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

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