Japanese automakers were hit hard by the March earthquake and the massive supply chain interruptions continue. It's so bad in fact that normalization of production at most domestic and overseas plants is expected to take until the end of the year.
Toyota is likely to suffer a global production drop of as much as 2 million units through March 2012. This means it will lose its title as the world's largest automaker to GM for sure, and may even be overtaken by Volkswagen.
Counting related industries, the auto industry makes up about 20 percent of the production volume of the manufacturing sector, so the whatever happens to it has a huge impact on the Japanese economy.