Japanese carmakers slash production by up to 50%

Japan’s big three carmakers today reported a dramatic fall in production as the auto industry counts the cost of plummeting global demand.

Toyota, the world’s biggest carmaker, said global production dropped 39.1% in January from a year earlier to 487,984 vehicles. Honda reported a fall of 33.5% worldwide to 226,551 vehicles and Nissan 54% to 145,286.

The global economic crisis has ravaged demand in major markets, forcing Japan’s carmakers to slash production and lay off thousands of workers.

The figures come days after the Unite union leader Tony Woodley warned of the imminent closure of a UK car plant with the loss of as many as 6,000 jobs.

Peter Mandelson, the business secretary, dismissed the claim and major carmakers have all insisted they had no plans for factory closures in the UK.

But other job losses in the UK have been confirmed. Nissan, which is to slash 20,000 jobs worldwide over the coming year, will cut 1,200 jobs at its plant in Sunderland. Toyota is implementing pay freezes and voluntary redundancies that could affect 3,500 workers at its factory in Burnaston, near Derby, and 570 employees at an engine plant in Deeside, Flintshire.

The firm, whose output fell to its lowest level for more than 20 years, said production in Japan fell by 40% last month, and by 65% in the US. Its global exports fell 57%, while those to the US, traditionally its most lucrative market, fell 80%, it said in a statement.

Honda’s total exports fell by 23.4% and Nissan by 31%.

Freefalling demand has sent shock waves throughout Japan’s car industry, only months after Toyota ended General Motors’ 77-year run as the world’s biggest carmaker by sales.

Industry-wide sales fell at their fastest rate for 34 years in 2008, and Yoichi Amano, head of the country’s automobile dealers association, said this week that domestic sales of vehicles could fall below 3m this year.

Last year car sales in Japan fell to a 34-year low of 3.21m vehicles, down from a peak of nearly 6m units in 1990, the association said.

The US car industry is expecting sales to reach a 27-year low of 10.5m vehicles this year, according to GM. In Britain, car production fell 58.7% in January from a year earlier, the Society of Motor Manufacturers and Traders said last week.

Honda, Japan’s second-biggest car firm, suffered its biggest global sales slump since 1999, with exports to the key US market down 62% in January from a year earlier. The firm is also suspending production for 35 days in April and May at its plant in Swindon, in addition to stoppages announced for February and March.

The dismal figures come amid a backdrop of unrelenting bad news for Japanese exporters across the board.

Figures out today showed exports fell by a record 46% in January from a year earlier, leaving the country with a record trade deficit of ¥952.6bn (£6.8bn), the fourth deficit in as many months and the biggest since records began in 1979.

The world’s second-biggest economy last week reported that GDP had contracted at by 3.3% in the last quarter of 2008, three times faster than the shrinkage seen in the US.

Justin McCurry in Tokyo
Wednesday 25 February 2009 11.11 GMT

Source: The Guardian

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