Toyota to resume Japan car output at half capacity

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April 8, 2011

SHINO YUASA Associated Press Fri Apr 08, 2011, 06:21 AM EDT

TOKYO — Toyota Motor Corp. said Friday it will resume car production at all its plants in Japan at half capacity from April 18 to 27 after the March earthquake and tsunami forced it to halt manufacturing due to shortages of parts and power.

Toyota, the world's No. 1 automaker, said production at its 18 plants will then halt from April 28 to May 9, a period that includes Golden Week holidays when factories would normally close.

Toyota said the parts shortage situation has been gradually improving since the March 11 tsunami but it is still struggling to procure around 150 types of parts. Toyota previously said there were shortages of about 500 types of components.

"There are problems on parts supply. But each day, we are doing our utmost to improve the conditions so that we can deliver cars to many customers," Toyota president Akio Toyoda said at the automaker's Nagoya office in central Japan.

The March 11 disasters destroyed parts factories in northeast Japan, causing severe shortages for Toyota and other automakers. A nuclear power plant was crippled by the tsunami, and others were forced offline, causing an electricity supply crunch in the Tokyo and neighboring areas that is expected to continue for months.

Toyota said it remained unclear when it would return to full production in Japan.

Spokeswoman Shiori Hashimoto said Toyota hasn't decided production plans for after May 9.

Nissan Motor Co. said Friday it would resume domestic production at half capacity from April 11. Nissan's parts factory that was hit by the tsunami will begin limited production from April 18.

But Nissan said it is unclear how long it can keep running its entire Japanese operations — five auto plants and two parts factories — amid the parts shortage.

Ryoichi Saito, auto analyst at Mizuho Investors Securities Co., said Toyota could report a loss for the April-June quarter if its production continues at half normal levels in the coming months.

"On and off production at limited capacity underscores the severity of parts shortage problems for Toyota," he said.

Toyota gets more than 90 percent of its auto components in Japan, according to Saito.

Toyota suspended all car production in Japan from March 14 to 26. Since late March it resumed limited production at a handful of plants. The tsunami disaster has resulted in a production loss for Toyota of 260,000 cars from March 14 to April 8.

The parts supply crunch has been felt around the world, from Malaysia to the U.K. to the United States. Some Toyota dealers in the U.S. said the popular hybrid Prius is in now in short supply due to high demand and factory outages in Japan after the quake.

Toyota said Monday it's inevitable that it will be forced to temporarily shut down all of its North American factories because of parts shortages. Apart from Toyota, Nissan and Ford Motor Co. have said several North American plants would be closed for some of April, and Chrysler CEO Sergio Marchionne has said his company will see disruptions.

Toyota's share price has fallen around seven percent since March 11 to close Friday at 3,340 yen ($39).

Moody's Investors Service warned this week it may downgrade Toyota's credit rating due to the financial fallout from suspended car production.

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