In 2011, only the Saab saga has surpassed that of the Japanese car manufacturers’ problems. Just when they were on their way to recuperate from the disruption caused by the March earthquake in Japan, the recent floods in Thailand have curtailed their plans – probably for much longer than originally anticipated.
IHS Automotive analyst Tracy Handler said: “Both Toyota and Honda won’t be able to expand production as planned until the first quarter of 2012. They’ve been really unlucky this year.”
Toyota, which in September recorded a rise in production for the first time in 12 months and was expecting to reach pre-earthquake levels in November, is now reducing its output.
Dion Corbet, a Toyota spokesperson, estimated that the Thai floods have reduced the company’s local capacity by 69,000 vehicles since October 10, while Japanese production has been reduced by 22,000 units.
Japan’s biggest carmaker will extend its reduced hours at its domestic factories until at least November 12. It will also continue to suspend overtime and Saturday shifts at its North American plants, and will reduce production at its factories in South Africa, Indonesia, Vietnam, Pakistan, Malaysia and the Philippines.
Honda is also eliminating overtime temporarily. The automaker will not only halve its North American plants production until it completes a new assessment of its inventory next week, but will also probably delay the release of the new CR-V and may even announce further reductions.
Toyota, on the other hand, said that it is continuing to assess the situation and has yet to decide on its production schedule.
So far, the lack of parts that led to disruptions in production have resulted in Toyota and Honda seeing their sales decrease by 8.8% and 5.3% respectively in the first 10 months of the year.
Story References: Bloomberg
