“We don’t know how much further the global economy will slide,” Toyota President Katsuaki Watanabe told reporters in Tokyo yesterday. “Car demand is falling from leading countries to emerging markets.”
Jan. 6 (Bloomberg) — Toyota Motor Corp., Japan’s largest automaker, will suspend some domestic production for 11 days in February and March, as the global recession saps car demand.
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Output at 12 domestic factories will be halted, company spokesman Hideaki Homma said today by phone, confirming an earlier NHK television report. The cut may reduce Toyota’s production by about 200,000 units, according to Koji Endo, an analyst at Credit Suisse Securities (Japan) Ltd.
Toyota, which expects its first operating loss in 71 years, is cutting production, as its sales last month plunged 37 percent in the U.S. and 18 percent in Japan. The company last month cut its sales forecast by 8.5 percent to 7.54 million vehicles for the year ending March 31.
“The company has no other choice but to widen production cuts, should sales keep falling further,” said Endo, who has an “underperform” rating on the stock. “Toyota needs to reduce inventory.”
The company this month plans to halt domestic production for three days. Toyota will also scrap night shifts at 16 of its total 75 assembly lines worldwide from January, it said last month.
Toyota’s U.S. deliveries plummeted to 141,949 in December from 224,399, as it failed to get a boost from no-interest loans offered on most models since Oct. 2. In Japan, the company sold 77,157 units last month, as demand for Lexus luxury cars plunged 43 percent.
Forecasts
The carmaker in December forecast an operating loss of 150 billion yen ($1.61 billion) in the year ending March 31. That compares with a previous profit forecast of 600 billion yen. The Toyota City, Japan-based automaker lowered its sales forecast 6.5 percent to 21.5 trillion yen.
“We don’t know how much further the global economy will slide,” Toyota President Katsuaki Watanabe told reporters in Tokyo yesterday. “Car demand is falling from leading countries to emerging markets.”
Toyota, maker of the Prius hybrid, in November cut its domestic production forecast by 8.6 percent to 3.85 million vehicles for the year ending March 31.
Toyota rose 1 percent to 3,040 yen, at the 11 a.m. trading break on the Tokyo Stock Exchange.
To contact the reporter on this story: Naoko Fujimura in Tokyo at [email protected].
Last Updated: January 5, 2009 21:27 EST
By Naoko Fujimura
Source: Bloomberg