Toyota output reduction may top 40,000 vehicles amid power crisis


Toyota Motor Corp. may lose output of at least 40,000 vehicles after Friday’s 9.0-magnitude earthquake damaged factories and crippled nuclear power plants, which led to electricity shortages.

Toyota had closed 12 plants across the nation through Wednesday, said spokeswoman Shiori Hashimoto.

Profit for the world’s largest carmaker will be cut by ¥6 billion for each day of lost operations, while Nissan Motor Co. and Honda Motor Co. may each lose ¥2 billion a day, Goldman Sachs Group Inc. estimated.

Sony Corp. and Toshiba Corp. also shut plants following the earthquake and tsunami. The disaster may trim 0.3 percent from the economy as power outages cut industrial production, Nomura Holdings Inc. estimated in a report.

“Not only is the struck region one of our production bases, those directly hit and vastly affected include our dealers, suppliers and numerous other partners,” Toyota President Akio Toyoda said in a statement on the company’s website.

Nissan suspended operations at four plants until Wednesday and at two other plants until Friday, the company said Monday.

The automaker earlier said 2,300 new vehicles were damaged by tsunami surges in the wake of the huge earthquake. Nissan doesn’t have an estimate of how much production may be lost, said spokesman Yuichi Nakagawa.

Honda will halt output through Sunday, reducing production by an estimated 16,600 cars and trucks and 2,000 two-wheelers, spokeswoman Tomoko Takamori said Monday.

Tokyo Electric Power Co., battling a possible meltdown at a nuclear reactor in Fukushima Prefecture, has been planning rolling blackouts to conserve power.

“This earthquake affected a wide area, and it’s likely that the economic impact will exceed the ¥20 trillion in damage sustained during the Kobe earthquake” of 1995, economic and fiscal policy minister Kaoru Yosano said.

Mitsubishi Motors Corp. planned to resume production at its three domestic factories Wednesday after a two-day halt, spokesman Kai Inada said.

“We don’t know how many cars we are going to lose” from the stoppage, said Mitsubishi Motors spokesman Yuki Murata.

Domestic production totaled 660,104 vehicles in 2010, he said.

Mazda Motor Corp. was to extend a production halt at four plants until at least Wednesday night due to a parts shortage, spokesman Ken Haruki said. The company isn’t disclosing how much output it will lose, he said.

Hino Motors Ltd. said it also planned a stoppage until at least Wednesday, and spokesman Hiromichi Suwa said the company was still trying to calculate the potential loss.

Truck maker Isuzu Motors Ltd. said it will stop output at its two plants until Friday.

The automakers may be able to make up for lost output by using excess production capacity at unaffected plants and running assembly lines on overtime and during holidays, Nomura analyst Jiyun Konomi said in a recent report.

“Capacity utilization at Japanese automakers’ plants in Japan is low,” Konomi wrote. “There does not appear to have been major damage to buildings or machinery and equipment” at Toyota and Nissan’s factories in the affected areas, he added.

The main risk to the nation’s manufacturing comes from the earthquake’s impact on infrastructure, rather than from direct damage to factories, Bhavtosh Vajpayee, head of technology research at CLSA Asia-Pacific Markets in Hong Kong, said.

The quake may trigger a supply shortage for electronic components including batteries and memory chips, Vajpayee wrote in a report.

“Closure of ports, damage to roads and electric power outages can do serious damage to the tech supply chain,” he wrote, adding that Japan is “critical” to the global supply in several electronics sectors.

Sony, Japan’s biggest exporter of consumer electronics, halted operations at 10 factories and two research centers Monday because of power outages and damage, spokeswoman Mami Imada said.