Toyota eyes U.S. output cutbacks after recalls: report

 @ibtimes on February 16 2010 8:56 AM

Toyota Motor Corp has decided to cancel production at two U.S. plants for a total of two weeks in anticipation of a drop in sales in the wake of its massive recalls, Japan's Chunichi Shimbun reported on Tuesday.

The world's biggest automaker plans to stop work at its Kentucky and Texas plants for 14 days between late February and April as sales of the Camry, Avalon, Tundra and other models recalled for sticky accelerator pedals slump, the newspaper said.

The Georgetown, Kentucky site will close for four days, including on March 12 and 26, and the San Antonio, Texas plant will close for 10 days, from March 15-19 and April 12-16, the paper said.

A Toyota spokeswoman in Tokyo said the company was checking the report.

Toyota faces a sales decline in the United States, its biggest and usually most profitable market, after the recall of more than 8.5 million cars worldwide for three separate defects since late 2009.

Toyota had already halted North American production of the vehicles with potentially sticky accelerator pedals for the first week of February to catch up with repairs. Output resumed on February 8 as planned.

Toyota's U.S. sales dropped 16 percent in January to the lowest level in more than a decade after it suspended sales of about half its inventory of vehicles including the popular Camry and Corolla sedans due to the accelerator pedal problems.

Toyota's U.S. executives had said at the National Automobile Dealers Association convention in Florida on Monday they were planning an aggressive marketing programme for March to prevent consumers switching to other brands.

The Toyota executives said most of the inventory of 131,000 vehicles involved in the recall have had their pedals repaired. By the end of February, almost all of them will be back in showrooms, they said.

JPMorgan Securities auto analyst Kohei Takahashi wrote in a report that Toyota's U.S. inventories grew in January but were not excessively high at 79 days' worth of supply.

Although it has already restarted production of models subject to recalls in North America, such production is being undertaken in lockstep with the prevailing sales conditions, Takahashi wrote.

Earlier this month, Toyota estimated a loss of 100,000 vehicles in sales globally from the recalls for the financial year to March 31. It said it had no projections for the new year beginning in April.

In a further blow, U.S. regulators said on Monday that customers' allegations of fatalities related to unintended acceleration in Toyota vehicles had reached 34.

Toyota President Akio Toyoda and quality chief Shinichi Sasaki are scheduled to hold a briefing in Tokyo on Wednesday on the progress of the recall of the Prius for a glitch in the brakes.

(Reporting by Chang-Ran Kim and Nathan Layne, editing by Will Waterman)

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