Toyota plans to slash its global production capacity by up to 10% to cope with weak sales, Japanese reports said on Wednesday. A Toyota manufacturing spokesman here in the UK confirmed discussions were taking place internally but said nothing had yet been finalised and no formal announcements made.
The Nikkei business daily said Toyota – which recently cut its annual operating loss outlook by JPY100bn ($1bn) and edged up its group-based global vehicle sales forecast for the current financial year by 1.5% to 6.6m units – would cut capacity by 1m vehicles from the current 10m.
Meanwhile broadcaster NHK said the reduction would amount to 700,000 vehicles.
A Toyota spokeswoman confirmed to news agency AFP the company planned to suspend from early 2010 until late 2011 a line at its Takaoka plant in Aichi prefecture that can produce 220,000 vehicles a year, but added no other cuts had been decided.
As widely speculated, Toyota would also reduce capacity by shutting down its Californian NUMMI joint venture with General Motors and by halting some production lines at factories in Britain and Japan, the reports said.
Toyota will soon announce the NUMMI closure decision, they said.
Closing NUMMI would reduce output capacity by 300,000 vehicles a year, while a further cut of 200,000 will come from halting one of two lines at Toyota Motor Europe’s plant in Derbyshire, here in Britain, that produces Auris and Avensis models, the reports said.
Toyota Motor Manufacturing UK spokesman Steve Carter told just-auto that the Burnaston plant had begun about six weeks ago to consider the best way of meeting current demand “in the most efficient manner” and was considering moving to a one-line operation – from one each for the Auris (Corolla) and Avensis at present.
“At this current time, nothing has been decided,” he said. “That’s just one of our production considerations.”
Carter said the UK plant had returned to full-time working for August and September to meet short-term demand stimulated by scrappage schemes in the UK and Europe but the plant was still operating at “significantly below our production capacity”.
He added that a lot of present demand was due to the upcoming 1 September ’59’ registration plate change [a twice-yearly occurrence in the UK that stimulates demand in March and September – ed].
“So the volume we have, we need to achieve quite quickly. The best way to do that was to come back on to full-time for August and September but we envisage we will return to our work share, 10% reduction in work hours and effective 4-1/2-day working week from October for the remainder of the financial year [ending 31 March, 2010],” Carter said.
The Japanese reports said Toyota’s domestic capacity would also be reduced by shutting down some production lines at major factories in the automaker’s home base of Aichi prefecture in central Japan.
But the affected production lines in Japan and Britain would only be idled so that Toyota could quickly restore production in the event of a recovery in demand, the Nikkei said.
It will also avoid job cuts in the two countries by dispatching workers to other plants or putting them on training courses, the paper said.
AFP noted that Toyota was enjoying brisk sales of its recently redesigned Prius hybrid (built manly in one of the Aichi prefecture plants) but overall demand was still well below levels seen before the economic crisis began.