Toyota Motor Corp. says its production will not return to pre-earthquake levels until November or December.
Toyota Motor Corp. says its production will not return to pre-earthquake levels until November or December.
The company's President Akio Toyoda told a press conference in Tokyo on April 22 that global production this year would fall well below the company's target of 7.7 million units to its lowest level since 2009.
He said damage wreaked by the Great East Japan Earthquake on the firm's parts network would affect its operations at home and abroad for an extended period.
The disaster is expected to reduce total production through June by at least 800,000 vehicles, slicing more than 10 percent off Toyota's planned annual output and production is expected to continue to lag into the latter half of the year.
All Toyota's factories in Japan had resumed operations by April 18, but current output is only about half of normal. Plants in the United States and Europe face temporary stoppages, and Toyota's Asian factories are expected to cut output by at least 50 percent.
Production in Japan is only projected to pick up in July. Overseas factories are expected to have to wait to August for an upturn.
There is a good chance of production remaining well below pre-disaster levels into autumn. Executive Vice President Atsushi Niimi warned, "We don't know how the production recovery curve will shape up."
Toyoda told journalists that the shortage of vehicles was being felt throughout its sales network.
"Our dealerships cannot even give customers a rough idea of when they will get their cars," he said.
An extended slowdown at Toyota will have major repercussions for a car industry already facing production levels at around half of normal in the April-June quarter.
But Toyoda said parts supplies were recovering. "In mid-March, 500 items were in short supply. That number has come down to 150," he said.
The problem for the automakers is that the lack of just one of the 30,000 plus components needed to make a car can stop a production line.
On April 22, Renesas Electronics Corp., a major chipmaker, said it planned to resume production at its Naka plant in Hitachinaka, Ibaraki Prefecture, on June 15.
Semiconductors made by the company are used in engine control systems throughout the industry, and major carmakers have been supporting Renesas' efforts to restart production. That cooperative effort is believed to have accelerated the reopening of the factory by about a month.
However, the factory will initially operate at just 5 percent of capacity. It is unclear when output will return to normal levels.
A long list of other components are in short supply. Toyota's Executive Vice President Shinichi Sasaki said efforts to source parts from multiple suppliers had been hamstrung by the interconnectedness of the industry. Many contractors rely on the same quake-hit makers for materials and electronics components.
Shortages have also hit Toyota's overseas manufacturing operations, Sasaki said, despite pre-quake efforts to source parts locally.
"The ratio of locally supplied components can fall to 50 to 60 percent in some cases," said an executive at a parts maker.
Toyota executives told journalists that they were reexamining their component procurement policies. In the future, the company will press its suppliers to manufacture more of their parts near its assembly plants and will urge Japanese suppliers to expand their operations overseas.
If Toyota's lead is followed by the rest of the industry, the March 11 earthquake may be a landmark in the continuing migration of auto industry production overseas.
Toyota's Thai unit said April 22 that production at its three plants in the country would be cut by 70 percent, starting April 25.
The factories will be closed Mondays and Fridays, and production levels on other working days will be cut by half. Similar measures are planned for other Asian factories.
Honda Motor Co. has halved production at its plants in Thailand. Nissan Motor Co.'s Thai unit said April 22 that it would stop operations on holidays and cut overtime.
(This article was written by Seisaku Yamamoto and Masaaki Shoji.)