Tokyo: Toyota Motor Corp said it could take until the end of the year before production has fully recovered to levels before the massive earthquake and tsunami on March 11 devastated Japan’s northeast, disrupting the supply of key parts.
In the clearest forecast yet of how long it will take for the Japanese auto industry to recover, Toyota said output would start to pick up in July in Japan and around August overseas, with a complete recovery not until November or December.
“With this many aftershocks, including one last night, we’ve seen some of the recovery work thrown back to square one many, many times,” President Akio Toyoda told a news conference.
“In that sense it’s difficult to say what the impact on production volumes or earnings will be.”
Japanese automakers have struggled to get assembly plants back up and running smoothly due to the disruption to supplies of mostly electronic and resin-based parts made in the region hit by a magnitude-9.0 earthquake and resulting tsunami.
Toyota has announced plans for production cuts in Japan, North America and China through June 3, and in Europe through the end of May. It has said it would decide on plans beyond that as it gets updates on parts availability.
By the end of April, it will have lost production of 500,000 vehicles globally, compared with pre-quake plans, with 400,000 units of that in Japan, Toyota said.
While Toyota said it was sticking to its goal of keeping the tradition of “monozukuri”, or manufacturing, strong in Japan by producing 3.0-3.2 million vehicles domestically a year, it said Japan as a whole should review how to protect the manufacturing industry in one of the world’s most earthquake-prone countries.
Toyota executive vice president Shinichi Sasaki said the automaker would encourage suppliers to consider setting up more production sites overseas to diversify risk.
In a sign of recovery, Japan’s Renesas Electronics Corp , a major supplier of chips to the auto industry, said on Friday that it would resume operations at a damaged factory north of Tokyo on 15 June 15, a few weeks ahead of schedule.
The news from Renesas, which has a 40% market share in automotive microcontroller chips, pushed Japanese auto stocks sharply higher, reversing earlier losses. Its announcement was a “big factor” in Toyota’s gaining more clarity on when it could completely normalise its production.
Toyota ended up 3.1%, while Nissan Motor Co put on 3.6% and Honda Motor Co gained 2.3%.
Toyota’s forecast may prove overly conservative in light of recent signs of factories starting to come back on line, a fund manager said.
“According to what we’re hearing directly from companies, it looks like the recovery on the ground is faster then people think and Toyota may well restart production even faster than they stated in this announcement,” said Tetsuro Ii, chief executive officer of Commons Asset Management.