Toyota Ceases Construction of Thai, Russian Plants

After confirming that 2008 brought the first ever annual operating loss, Toyota continues its fight against the economic downturn with a new cost-cutting measure, this time targeting Thailand and Russia. In short terms, the Japanese automaker will stop the construction of new factories in Thailand and Russia due to the same over-discussed economic crisis, Autonews reported quoting the Japanese publication Sankei. This is just a move supposed to help Toyota align its offering to the market demand, the aforementioned source added.

What's really interesting is that Toyota had quite enthusiastic plans regarding the two factories, as it aimed to raise the annual out capacity by more than 100,000 units. For instance, the Thai production facility was especially supposed to manufacture 150,000 diesel engines per year, which could raise the overall capacity to 350,000 units in 2010, according to figures given by Autonews. Moreover, the new production facility would have created 700 new jobs in the region.

Unfortunately for the automotive industry, Toyota is not the first company that alters production and stops construction of new plants due to the economic downturn. Fiat for instance decided to suspend operations of no less than 14 facilities in December, explaining that such a move was absolutely necessary in order to adjust its production to reflect the market demand.

SEAT is another victim of the economic downturn, with the Spanish carmaker creating a special restructuring plan dubbed Labour Force Adjustment Plant (LFAP) that put on hold production of several facilities.

“This temporary LFAP to be presented consists of 7 to 29 non-production days at the different production lines. The workforce affected by these production stoppages will fall within the scope of the existing LFAP,” SEAT explained. “The company has been forced to adjust its production forecast for the first half of 2009 to harmonize production volume with expected demand.”