Toyota is to make more cuts at some North American plants in the next few months as it tries to halve completed vehicle stocks.
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A Toyota spokesman in Japan declined to disclose to Reuters the number of vehicles being cut from the schedule.
Following a now familiar pattern in the industry, Toyota had set non-production days that vary by assembly line and model at plants in Canada (where it recently opened a second factory to build the RAV4 SUV and immediately postponed plans to add a second shift) and in Kentucky, California (a JV with GM), Texas (where a truck plant was last year shut for three months), Indiana, West Virginia and Alabama in the US.
“This is a tough environment, and it may continue for a while,” Toyota Motor Engineering & Manufacturing North America spokesman Jim Wiseman told the news agency.
“In addition to slowing production, we are redoubling efforts to cut costs at each of our facilities.” Wiseman added further action might be needed to cope with falling sales and rising inventories.
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By GlobalDataToyota’s US marketing head Jim Lentz said earlier this week the firm would reduce US inventory of unsold vehicles to match demand by May.
“The current inventory level is a record high for Toyota, though the market slump is unprecedented so rising inventories are unavoidable,” Okasan Securities analyst Yasuaki Iwamoto told Reuters.
“Sales are falling 30-40% every month, and this pace of fall is unheard of for either Toyota or the overall industry,” he said. “Automakers have to cope with it through production cuts as quickly as possible.”
Toyota this week added another 11 days of downtime at its Japanese factories next month and March.
Japanese automakers began slowing output at their US ‘transplant’ factories as long ago as last July after a fuel price strike and the then-growing credit crisis started to hit vehicle sales, especially of full-size pickup trucks and SUVs.
The cuts intensified later in the year, extended to factories in Japan, and elsewhere, and have now spilled over into the new year. A number of automakers have now extended shutdowns originally planned to end this month, and added temporary closures further into the first quarter.
Nissan is offering voluntary layoffs to production workers in the US while Toyota, after initially replacing SUVs with the Prius as the product of a new plant it is building in Mississippi, has now postponed production of the hybrid there altogether. It will complete the building but not fit it out with production equipment until sales start to rise again.
The big question is: when will that happen?
