Toyota: earnings hit but priority is Japan recovery

By @ibtimes on

Toyota Motor Corp <7203.T> President Akio Toyoda said on Friday that the devastating earthquake and tsunami in northeast Japan would hurt the company's earnings, but said that was not on his list of priorities.

We're not thinking about numbers right now, Toyoda said the company's headquarters in Toyota City, adding he could not estimate the scope of the impact.

The priority now is the safety of the victims of the disaster, and to try and bring back normal operations as quickly as possible to restore hope, he told reporters after addressing new hires at a ceremony to mark their first day of work.

Deutsche Securities this week slashed its forecast for Toyota' operating profit by 84 percent to $1.7 billion for the current business year due to production outages.

Toyoda repeated the company's stance that it is uncertain when it can resume full production after the March 11 disaster disrupted its supply chain.

The world's biggest automaker has stopped producing vehicles at all but two of the 18 group factories that build Toyota and Lexus cars in Japan. At those two factories it is only assembling a limited number of three hybrid models at a reduced rate.

This time, all of eastern Japan is affected, Toyoda said. Rather than think about one automaker's recovery, we want to think about how we can help to restore the lifeline of infrastructure to this region.

Commencing the new hires' ceremony with a moment of silence in memory of the victims of the disaster, Toyoda spent the first few minutes speaking of the need for Toyota to help restore the damaged communities in the north and contribute to the nation's recovery.

Toyoda, who visited the damaged areas earlier this week, told reporters that Toyota would remain committed to the northeast region, Tohoku, which it started to build up as its third production base in Japan several years ago.

It's about the recovery of Japan, he said. He added that rolling power blackouts would be inevitable during the peak summer season, and there was a limit to what one company could do to resume normal operations.

GLOBAL SUPPLIES AFFECTED

Toyota is certainly not the only auto company suffering from the effects of the disaster in Japan. Companies across the globe have idled plants because of the ripple effects of a lack of parts and many are only now able to resume limited production.

Honda Motor Co <7267.T> and Mazda Motor Corp <7261.T> on Thursday became the latest major automakers to say they would resume some production in Japan.

Honda said it would resume production of parts for overseas use on April 4 and production at all its car factories on April 11. Operations are scheduled to resume at about 50 percent of its original plan.

Honda also said production cuts at its plants in the United States and Canada would last through April 15. The company warned that output could still be disrupted after that date because of the uncertainty around the supply of parts from Japan.

Honda has not decided when it will resume full-scale operations, a company spokeswoman said. She also declined to specify which models the company will produce.

Mazda Motor Corp said it plans to restart limited production of vehicles from April 4 at its Hiroshima and Hofu plants. A decision on the resumption of full-scale production of both parts and vehicles has not been made.

A Mazda spokesman declined to say if the parts it is using are being produced by its suppliers or if they are coming out of suppliers' inventory. Mazda also declined to comment on which models it would begin producing, or how many.

In resuming operations, Honda and Mazda follow rival automakers Suzuki Motor Corp <7269.T> and Fuji Heavy Industries Co <7270.T>, manufacturer of Subaru cars, which both restarted partial production earlier on Thursday.

In the United States, both General Motors Co and Ford Motor Co have either closed factories or slowed production because of a lack of parts.

About 13 percent of worldwide auto output has been lost due to parts shortages and IHS Automotive has estimated this may cut output by as much as 30 percent within six weeks in a worst-case scenario.

(Editing by Michael Watson and Matt Driskill)

Join the Discussion