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Toyota Suspends Output at India Plants on Wage Impasse

March 17 (Bloomberg) -- Toyota Motor Corp., the world’s largest automaker, said it’s suspending production in India after an impasse with union workers over wages led to output disruptions and threats to plant managers.

Toyota has called a lockout at its factories near Bengaluru, formerly known as Bangalore, after a breakdown in negotiations that began last year, the Toyota City, Japan-based carmaker said in an e-mailed statement.

“The company is left with no other option but to declare a lockout to ensure the safety of its workers and management personnel,” Toyota said in the statement. The automaker said it will continue talks with its union and expects daily production to be cut by about 700 vehicles during the suspension.

The lockout in India plants adds to unrest in emerging markets that President Akio Toyoda has called “unpredictable.” The head of the carmaker’s operations in Thailand, its second-biggest production base in Asia after Japan, said in January that protests against Prime Minister Yingluck Shinawatra may affect future investment plans.

Toyota fell 0.4 percent to 5,531 yen at 11:30 a.m. in Tokyo trading, compared with the 0.8 percent decline by the benchmark Topix Index. The stock has lost 14 percent this year.

Auto sales in India are headed for the first annual drop since the fiscal year ended March 2002, as slowing economic growth, rising interest rates and unstable fuel prices hurt demand. Toyota’s deliveries there declined 19 percent to 22,194 vehicles in the first two months of this year, according to statements on the company’s website.

Toyota has built vehicles in Asia’s third-largest economy since 1999. The company’s India facilities build the Camry, Corolla Altis and Etios cars, the Innova van and the Fortuner sport utility vehicle.

To contact the reporter on this story: Craig Trudell in Tokyo at ctrudell1@bloomberg.net

To contact the editors responsible for this story: Young-Sam Cho at ycho2@bloomberg.net Chua Kong Ho

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