Toyota, the world’s largest carmaker, is to reduce production at several of its North American plants over the next few months in an attempt to halve its vehicle inventory.
It is the latest cutback on the part of manufacturers which are fighting the impact of slumping sales in the mature markets of North America, Europe and Japan as well as in emerging markets such as India, China and Russia amid a spreading global recession.
Toyota’s announcement followed a newspaper report that Nissan planned to move production of its March subcompact car to Thailand from Japan as part of an overhaul to cut costs.
Nissan refused to comment on its future product plans. The company announced further production cuts in Japan late last week and a source said it would post an operating loss this financial year.
Toyota, which has warned it would post its first-ever annual operating loss this fiscal year, said its inventory of North American built vehicles ranged between 80 and 90 days. It hopes to cut that in half in the second quarter of the year.
It is also halting production at its Japanese plants for 11 days in February and March.
“This is a tough environment, and it may continue for a while,” said Jim Wiseman, vice-president of external affairs for Toyota Motor Engineering & Manufacturing North America.
“In addition to slowing production, we are redoubling efforts to cut costs at our facilities,’’ he said, adding that it might have to take further action to deal with falling sales and rising inventories.
Toyota has scheduled non-production days at manufacturing facilities in Canada and in Kentucky, Indiana, California, Texas, Indiana, West Virginia and Alabama in the United States. The number of non-production days varies by assembly line and model.
Toyota’s US marketing head, Jim Lentz, said the company would bring its US inventory of unsold cars and trucks in line with demand by May.
Toyota’s US sales fell by 15 per cent in 2008.