Petrol Stop

Toyota to trim output in India by 70% due to parts shortage

Friday, 22 April 2011

22 April 2011;economictimes.indiatimes.com:NEW DELHI: Japanese car giant Toyota today said it will reduce its production by up to 70 per cent in India between April 25 and June 4 due to supply constraints of components following the devastating earthquake and tsunami. On account of this measure there will be a production loss of about 7,000 units a month, translating into a revenue deficit of Rs 490 crore to its Indian entity -- Toyota Kirloskar Motor. "This production adjustment step is a temporary measure from April 25 to June 4...We will be losing about 7,000 units per month," Toyota Kirloskar Motor (TKM) Deputy Managing Director (Marketing) Sandeep Singh told PTI. Under the plan, production at TKM's two plants in Bangalore will be suspended on Mondays and Fridays during the nearly one-and-half month period. The company will operate about 30 per cent of its normal capacity of 11,000 units a month during this period, he added. TKM currently manufactures models like sedan Etios, multi utility vehicle Innova, premium sedan Corolla Altis and SUV Fortuner in India. On the impact of the temporary production cut on waiting period of vehicles, Singh said: "We are having waiting periods for all our models and it ranges from one month to three months. After this production cut, it will increase by an another month." At present, the waiting periods for Etios and Innova are two to three months each, while that of Fortuner and Corolla Altis are three months and one month respectively, he added. When asked about income loss, TKM Deputy Managing Director (Commercial) Shekar Viswanathan said: "Because of the production drop, the revenue loss will be on an average Rs 7,00,000 per vehicle." On that basis, the overall production loss of 7,000 units per month translates to about Rs 490 crore. Viswanathan, however, declined to comment on when the company expects the situation to become normal, and said TKM has not laid off any worker due to this step at its plants. "The company primarily imports engine and transmissions from Japan and other region. But, even if we import some components from other countries, it is somehow linked with Japan," Viswanathan said. In a statement, the TKM said there will be no impact on its service and spare parts supply operations. "It is important to note that this is a necessary response to a short-term supply issue and we intend to restore the normal operations as soon as possible," TKM Managing Director Hiroshi Nakagawa said.