Toyota to halve domestic output

Unexpectedly bad sales prompt more suspensions nationwide

NAGOYA (Kyodo) Toyota Motor Corp. will cut domestic output in half from February through April and set production at about 9,000 units per operating day, industry sources said Saturday.

The company decided to suspend 11 of its 12 factories in Japan on Saturday to address plummeting sales and a deepening global recession.

The drastic plan, which temporarily cuts vehicle output to half the previous year, is likely to lead to further production suspensions and higher losses for the year.

The drastic cut will bring production below 11,000 units per day, which is said to be the borderline for profitability.

This is the first time Toyota has suspended production on this scale since August 1993, when it halted all domestic plants for a day to deal with the yen’s rapid appreciation against the dollar, which was consuming its earnings.

Toyota’s domestic vehicle output was averaging about 20,000 units a day in 2008. But late last year, as the global downturn took hold, it suddenly cut production for the January-March quarter to 12,000 units per day.

Saturday’s decision to add additional suspensions in February apparently reflects a dire drop in global sales.

The new plan will suspend factory operations for 14 days between January and March.

In January, Toyota will halt 11 of its 12 factories in Aichi Prefecture for three days: Jan. 17, next Saturday and Jan. 30.

In February and March, it will halt all 12 factories for 11 days. Its three manufacturing subsidiaries — Toyota Motor Hokkaido Inc., Toyota Motor Tohoku Corp. and Toyota Motor Kyushu Inc. — will also suspend operations during the January-March period, in line with the move by the parent.

Toyota suspended operations at two factories in December. Both of these factories focus on making large North American-bound vehicles, which have also been selling poorly.

The latest step reflects the all-around plunge in car sales. Toyota was forced to make the additional output cut because inventories are piling up, and the slump in global auto sales is showing no signs of recovery.

In December, Toyota’s car sales in the United States tumbled 36.7 percent from a year earlier to 141,949 units, and previously robust sales of smaller models dwindled.

Toyota expects its vehicle sales for the year to plunge 15.4 percent to 7.54 million units on a consolidated basis.

North American cuts

NEW YORK (Kyodo) Toyota Motor Corp. will suspend production at all seven factories in North America for a maximum of 30 days between January and March to respond to dwindling sales, company officials said Friday.

The step at the factories in the United States and Canada is designed to halve inventories, which have swelled to 80 to 90 days, the officials said.

At the Indiana factory, Toyota plans to suspend output of the Sienna minivan for 30 days, while it will suspend for 21 to 25 days production at the California plant run by a joint venture with General Motors Corp., the officials said.

Toyota saw new car sales in the U.S. tank 37 percent in December over the previous year.