Toyota to halt Europe production for 8 days

[April 13, 2011]  TOKYO (AP) -- Toyota Motor Corp. said Wednesday it will suspend production in Europe for eight days due to parts shortages following last month's massive earthquake and tsunami in Japan.

The move underscored how the supply crunch in the wake of the March 11 twin disasters is affecting Toyota's operations beyond Japan. The world's No. 1 automaker announced last week it would suspend car production in North America in April.

Toyota said it will halt European output at five plants on eight days between April 21 and May 2 -- auto assembly factories in Britain, France and Turkey, and engine plants in Britain and Poland. After the stoppages, the plants will run at limited capacity in May.

The magnitude-9.0 earthquake and ensuing tsunami on March 11 destroyed auto parts factories in northeastern Japan, causing severe shortages for Toyota and other automakers.

Mamoru Kato, an auto analyst from Tokai Tokyo Securities Co. Ltd., said if the supply crunch drags on, Toyota could incur "big losses" in the April-June quarter.

"The company simply cannot manufacture cars due to parts shortages. In North America and Europe, Toyota procures almost all engine parts from Japan. Suspended production in Japan and North America is a big blow to Toyota," he said.

In Japan, Toyota is currently shutting down output except at three plants, which are running at limited capacity.

Toyota said it suffered a production loss of 260,000 cars in Japan from March 14 to April 8 alone. The disasters also cost production losses of 50,000 cars in Europe and 35,000 cars in North America.

Toyota said it will resume car production at all its plants in Japan at half capacity from April 18 to 27, but production will then stop from April 28 to May 9, a period that includes Golden Week holidays when factories would normally close.

Toyota spokeswoman Shiori Hashimoto said Wednesday it remained unclear when the company would return to full production in Japan. Toyota hasn't decided production plans for after May 9.

Production in Japan alone accounts for 43 percent of Toyota's global production last year. In North America, where Toyota produces nearly 20 percent of its total output, the company said it would impose a series of one-day shutdowns at its North American plants from April 15-25.

Amid concern over a prolonged production suspension, Moody's Investors Service warned last week that it may downgrade its credit rating for Toyota.

The news didn't rattle shares in Toyota, which were up 1.3 percent to close at 3,285 yen Wednesday on the Nikkei 225. But its share price has fallen nearly 10 percent since March 11 due to concern over suspended production.

[Associated Press; By SHINO YUASA]

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