JAPAN: Toyota cuts Lexus output after China troubles
A Lexus RX SUV on the Kyushu line (file photo: Graeme Roberts/just-auto.com)
As anti-Japan demonstrations in China continue affecting sales there, Toyota will scale back production of Lexus vehicles for that market as early as this month, a media report said.
According to the Nikkei business daily, Toyota will reduce output at its key Lexus factory in Kyushu, Fukuoka Prefecture. Daily production will be lowered about 20% from the current 1,300 units to roughly 1,000 indefinitely. Affected models include the ES, a sedan sold exclusively outside Japan and the compact CT 200h hybrid hatchback.
For now, Toyota plans to rely on local inventory for sales in China. Some of its Chinese dealerships were damaged in the recent demonstrations, including some set on fire. A company official said sales were down about 30% compared with before the recent flare-up of a long-running territorial dispute which shows no sign of ending soon.
But, as the protests appear to be quietening down, Toyota hopes to return production to normal quickly.
The operator of the Fukuoka factory, Toyota Motor Kyushu, built 302,000 vehicles last fiscal year, with 22% exported to Asia, mainly China. The subsidiary may fall short of the 350,000-unit production target for this fiscal year due to the output cut, the Nikkei noted.
Other Japanese automakers, including Nissan Motor and Honda, export a limited number of vehicles to China so their domestic production is not expected to be impacted significantly. A Honda official said that the effect of the protests on domestic output would be negligible.
Toyota also has Chinese production JVs including one with Guangzhou, also a local Honda partner.