Bloomberg News

Toyota Speeds North America Output as Thai Flood ‘Behind Us’

November 20, 2011

(Updates with Asia output in sixth paragraph.)

Nov. 18 (Bloomberg) -- Toyota Motor Corp.’s North American plants are running overtime again after briefly slowing when Thailand’s floods reduced supplies of parts, the company’s U.S. sales chief said. The effect was less than suspected at first.

“Early on we didn’t know how bad it could be, but it ended up being a false start,” Jim Lentz, president of the Japanese carmaker’s U.S. sales unit, said in an interview. “Whatever impact it had is behind us.”

Output in North America is recovering ahead of other regions, where Toyota is still assessing when production will return to normal. The disruptions caused by the flooding in Thailand, which supplies electronics, rubber and plastic parts, delayed efforts to rebuild inventory thinned earlier this year by Japan’s earthquake and tsunami.

The main issue for Toyota’s North American plants, where the carmaker canceled some overtime shifts, was audio parts from Thailand, Lentz said yesterday.

“Compared with cars made in Japan and other countries in Asia, Toyota’s vehicles made in North America must have been less dependent on parts from Thailand, allowing it to normalize quicker,” said Satoru Takada, an analyst at TIW Inc. in Tokyo.

Japan Output

Toyota expects output at domestic factories to normalize from Nov. 21 to Nov. 25, when it has “some overtime shifts scheduled,” Amiko Tomita, a spokeswoman for the Toyota City- based automaker, said by phone today. The company is still assessing at what level it will be operating factories in Japan after Nov. 28.

Toyota is producing cars at reduced levels in Indonesia, the Philippines, Malaysia, Vietnam and South Africa and hasn’t determined output levels in each of the countries after Nov. 21.

Sales of Toyota, Lexus and Scion models in the U.S. fell 8.8 percent this year through October as a five-month production slowdown, caused by Japan’s March disaster, limited vehicle supplies. Industrywide U.S. sales have risen 10 percent this year.

In North America, “We are back to running what we had already planned for November in terms of overtime and Saturday shifts,” Lentz said.

Lentz spoke by phone from Blue Springs, Mississippi, where the company officially opened an $800 million plant to produce Corolla small cars. The factory will be able to build 150,000 vehicles a year and employ about 2,000 people, the company said.

Toyota’s U.S. sales unit is based in Torrance, California. The company’s shares fell 2.2 percent to 2,450 yen as of the 11 a.m. break in Tokyo trading.

--Editors: Jamie Butters, Terje Langeland

To contact the reporter on this story: Alan Ohnsman in Los Angeles at aohnsman@bloomberg.net; Anna Mukai in Tokyo at amukai1@bloomberg.net

To contact the editors responsible for this story: Jamie Butters at jbutters@bloomberg.net


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