November 9, 2011 / 3:39 PM / 7 years ago

Toyota aims to restore Japan output early 2012: source

TOYKO (Reuters) - Toyota Motor Corp has told parts suppliers it aims to restore Japanese production to normal levels by early 2012, recovering from the impact of Thai flooding that hit suppliers, a source familiar with the situation said on Wednesday.

A Toyota spokeswoman declined to comment on the plans, although the company said on Wednesday its three Thai factories would resume partial operations on November 21 as it grapples with the impact of Thailand’s worst flooding in 50 years.

Japan’s top automaker has halted production at the three plants in its southeast Asia production hub since October 10 after flooding affected suppliers, forcing it to reduce production from October 24 in Japan, where output is running at 70 to 80 percent of planned levels.

Toyota aims to secure alternative parts by the end of this year and return output to originally planned levels at the start of 2012, the source said, adding Toyota was also looking at how it might restore production from overseas plants at about the same pace as its recovery in Japan.

The plan is in line with analysts’ expectations of a relatively swift restoration of production after Toyota said the disruption would not be as severe after as the March earthquake and tsunami in Japan.

“Our view was that it would take 1-1/2 to two months to resolve supply chain problems caused by flooding in Thailand,” Bank of America Merrill Lynch auto analyst Takaki Nakanishi wrote in a research note.

“Our impression was that the company would make back much of the production lost in October-December before the end of the business year (on March 31).”


Toyota has said the supply of about 100 parts has been disrupted by the Thai floods, primary resin, casting and electronic items.

One major bottleneck for automakers has been a halt in chip supplies from Japan’s Rohm Co to parts makers such as Denso Corp and Aisin Seiki Co.

Rohm said on Wednesday it aimed to restore production at its flooded Thai factories in December, with a return to full output in February.

Toyota will provide further details on its production resumption in Thailand as early as next week, a company spokesman said.

The automaker on Tuesday withdrew its annual profit guidance as the Thai floods cast uncertainty over its production outlook.

Nomura Securities analyst Masataka Kunugimoto said he was assuming the floods would cut Toyota’s output by a total of 250,000 vehicles in the year to March. Toyota has estimated an output loss of about 150,000 vehicles globally between October 10 and November 12.

Expectations of a relatively quick end to Toyota’s supply problems leave just Honda Motor Co struggling to regain its footing.

Honda’s car factory in the industrial estate in Ayutthaya is under water, unlike plants of other automakers, and the company has said it could take until March to restart production there.

Separately on Wednesday, Toyota announced a recall of 550,000 Toyota and Lexus vehicles, primarily in North America, to replace the crankshaft pulley on their engines. No accidents have been reported as a result of the defect.

The vehicles subject to the recalls, including certain Camrys, Avalons, Seinnas and Lexus RX330s, were produced between June 2004 and March 2005.

Shares of Toyota ended up 1.6 percent at 2,542 yen, roughly in line with the Tokyo’s TOPIX index.

Additional reporting by Chang-Ran Kim, Yuka Obayashi and Rie Ishiguro in Tokyo, with Yoshiyuki Osada in Osaka; Editing by Edmund Klamann and David Holmes

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