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Toyota extends US production cuts due to parts shortage

Toyota Motors has announced plans to extend its production cuts in North America as it continues to face a shortfall in supply of parts.

Toyota said it will cut production at its North American plants by 70% from 26 April to 3 June.

Car manufacturers have been facing a shortage of parts due to the damage caused to Japanese component makers by the earthquake and tsunami.

Toyota said it may also lower its US sales target for 2011.

Last week the company had said that its North American plants would operate on eight-hour shifts for just three days a week.

It has now reduced the working hours even further, asking employees to work just four-hour shifts during the ensuing period.

However, Toyota spokesman Mike Goss said that about 30,000 employees will remain on the company's payroll during the slowdown.

Toyota Motors also announced that it is curbing production at its factories in China.

Plants in the mainland will operate at 30% to 50% of their capacity from 21 April to 3 June due to a shortage of parts, the company said in a statement.

The carmaker said it would also bring forward its July summer break in China to counter the shortfall in parts supply.
Sales targets

The world's biggest carmaker's sales in the US had been hit due to a spate of recalls last years.

There had been concerns about safety and quality as a variety of issues forced Toyota to recall millions of vehicles worldwide.

While it has been trying to win back customer confidence and boost its sales, the recent slowdown in production is likely to dent its numbers.

"It's possible that we may need to adjust the sales targets," said Bob Carter of Toyota.

However, Mr Carter said while the situation with the supply of parts was improving it was too early to gauge the full impact of the slowdown on the numbers.

"As the week goes by we should have more and more clarity," he added.

BBC News

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