Thursday, March 24, 2011

Toyota to slow some N.American production

WASHINGTON: Toyota Motor Corp will slow some North American production because of supply disruptions caused by the earthquake and tsunami in Japan.

The world's biggest automaker told employees and dealers on Wednesday it was too early to determine the scope, timing and duration of a slowdown but facilities in the United States, its single-biggest market, and in Canada and Mexico are all being considered.

Cindy Knight, a Toyota spokeswoman, said the company had ample supply of most products for the region, adding, "We are doing all we can" to ensure that vehicles are available to dealers.

"We will continue to work closely with suppliers in North America and Japan to minimize any disruptions to Toyota's overall North American operations," Knight said.

Most parts for Toyota's North American-built vehicles come from about 500 suppliers in the region. The company said it continues to receive parts from Japan that were already in the pipeline, limiting the immediate impact of the disruption there.

Shares of Toyota fell 1 percent to close at US$82.14 on the New York Stock Exchange.

Toyota has suspended production at all of its 12 assembly plants in Japan at least through March 26. Supply chain disruptions will also force the company to delay introduction of two new additions to the Prius hybrid model.

Toyota ships more than half of its Japan output to overseas markets. It operates nine manufacturing plants in the United States, two in Canada and one in Mexico.

Scores of Japanese manufacturers, including the other big Japanese auto companies, are facing supply chain disruptions after the March 11 disaster.

Suzuki Motor Corp said its three assembly factories in Japan will remain closed on Thursday and Friday. Honda Motor Corp has suspended production in Japan until March 27.

Michelle Krebs, senior analyst for buyer resource Edmunds.com, said shutdowns now occurring outside Japan are probably just the beginning.

"All automakers are just now figuring out who supplies every little part. The shortage of any one could shut down an assembly line. Toyota isn't the only one vulnerable; virtually all major automakers have some risks," Krebs said.

While Toyota did not identify where production would be affected in North America, other manufacturers with dwindling inventories are looking at slowing production of low-selling models.

For instance, General Motors Co has temporarily idled its pickup plant in Shreveport, Louisiana.

Toyota's pickup plant in San Antonio, Texas, could fit the criteria as well, according to a source familiar with the company's thinking.

Full and midsized pickups are among the weakest arm of Toyota's U.S. lineup, which heavily features fuel efficient cars like the hybrid Prius and Camry and Corolla models and popular sport utilities.

Knight said the company had not determined which plants are affected.

Seeking to recover business lost during a safety crisis marked by massive recalls, stepped up marketing, and an improving economy helped Toyota exceed expectations with a 42 percent gain in U.S. sales in February to 141,846 vehicles. - Reuters

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