Toyota Deals with Crisis, Severely Reduces Production in the US

Weak demand in the automotive industry has already determined car makers to cut down production in a manner they haven't done before.

Facing the same problem, Toyota Motor Corp has officially announced it would continue to reduce production in several North American plants over the next few months, the Autonews reported. The Japanese car automaker plans to reduce the numbers of vehicles by half.

However, Toyota spokesman Yuta Kaga in Tokyo refused to reveal the actual number of vehicles to be reduced. In addition, Toyota said last week it would also stop production at its Japanese plants for 11 days in February and March.

"This is a tough environment and it may continue for a while," Jim Wiseman, vice president of external affairs for Toyota Motor Engineering & Manufacturing North America, said in a statement.

More importantly, this is not the only extreme measure taken by the Japanese automaker. Another decision regards non-production days at manufacturing facilities in Canada and in Kentucky, California, Texas, Indiana, West Virginia and Alabama. The number of non-production days depends on the assembly line and model.

"In addition to slowing production, we are redoubling efforts to cut costs at each of our facilities," Wiseman said, adding that further action may be needed to cope with falling sales and rising inventories.

Toyota resorted to such measures as “Sales are falling 30-40 percent every month, and this pace of fall is unheard of for either Toyota or the overall industry," Okasan Securities analyst Yasuaki Iwamoto said. "Automakers have to cope with it through production cuts as quickly as possible," he added.

No need to despair though... with Toyota managers deciding to buy the company's cars as we reported yesterday, the Japanese car maker has already found some faithful buyers...
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