SHANGHAI – Toyota Motor Corp., the automaker most affected by the March 11 disaster, said Wednesday it will reduce auto production at all of its Chinese plants by 50 to 70 percent until June 3 due to parts supply disruptions following last month’s earthquake and tsunami disaster.
The world’s largest automaker said in a press release it has decided that “vehicle production in China will be carried out at 30 percent to 50 percent of normal from April 21 through June 3 due to parts supply difficulties.”
According to Toyota, the slowdown will lead to a production drop of around 80,000 vehicles, impacting operations in the country it sees as a key market.
The slowdown will affect seven production lines at its four assembly plants, in Changchun, Chengdu, Guangzhou and Tianjin.
The company added that Toyota-related plants in China will observe the annual July summer holiday period early, from the end of April through the beginning of May, as part of efforts to scale back production.
Toyota, which last year sold 840,000 vehicles in China, and hoped to reach 900,000 vehicles this year, noted there is a possibility the company will no longer be able to achieve the target.
Toyota produces the Corolla and Camry models in China for the domestic market.
The company earlier decided to drastically reduce production at its 14 plants across North America from Tuesday next week.
Toyota may have problems with parts stemming from the earthquake-tsunami catastrophe, and industrywide supply may fall short of demand in China, Masayoshi Hori, executive coordinator for the automaker, said at the Shanghai auto show Tuesday. The carmaker’s China operation is monitoring the situation, he said
Aichi Prefecture-based Toyota lost production of 260,000 units from March 14 to April 8. It has resumed operations at all of its domestic plants, with output remaining at 50 percent of its scheduled levels. Manufacturing has been reduced at its overseas plants, including those in North America, Europe and Australia.
Separately, Hori said the automaker plans to double China sales in 2015 from the 846,000 vehicles it sold in 2010.
“Toyota obviously sees China as an important market,” said Issei Takahashi, an analyst at Credit Suisse Securities Japan Ltd. Toyota fell 3.1 percent to ¥3,125 at the 3 p.m. close of trading in Tokyo. The stock has declined 14 percent since March 10, the day before the temblor.
The maker of the Prius hybrid is considering production of hybrid parts in China and local sourcing of motors and batteries, Hori said. Toyota will test electric cars in the country this year, he added.
Toyota expects the Chinese auto industry to grow by 10 percent to 15 percent this year, Managing Officer Shinji Kitada said Tuesday in Shanghai.
Chinese demand is strongest for compact cars and sports utility vehicles, he said, adding that Toyota is “able to secure solid profitability.”