Toyota Might Produce 40,000 Less Cars After Japan Earthquake

Toyota Motor Corp., the world’s largest carmaker has been hit hard by the recent earthquake, which has damaged a number of key production facilities in Japan. The strong quake has also crippled nuclear power plans, causing electric shortages across the nation that will continue to hamper the nation’s industry. In consequence, TMC could see a production loss of as much as 40,000 vehicles.

According to Shiori Hashimoto, a spokeswoman for the Toyota City - the Japan-based company, a total of 12 plants are to remain closed across the country through March 16th. As a result, the carmaker’s profit will be sliced by 6 percent, or JPY6 billion ($72 million), for each day of post production in Japan. According to a Bloomberg report, Goldman Sachs estimates that Nissan and Honda will both lose a further JPY2 billion ($24 million) a day.

“We don’t know how long it will take for manufacturers to return to normal operations, with the current situation at the nuclear power plants,” said Toshihiko Matsuno, a senior strategist at SMBC Friend Securities Co. in Tokyo. “If they can resume output, they can sell as the U.S. economy is signaling a recovery.”

With no clear picture yet available, investors are cutting their losses and selling TMC stock. Shares fell .7.9 percent in Nikkei trading today, the most since Decenber 2008, closing the day at JPY3.310 a piece.

“No one knows the complete picture yet on how big the damage will be from the earthquake,” said Toshikazu Horiuchi, a market analyst at Cosmo Securities Co. in Tokyo.

“This earthquake affected a wide area, and it’s likely that the economic impact will exceed the 20 trillion yen in damage sustained during the Kobe earthquake” of 1995, Economic and Fiscal Policy Minister Kaoru Yosano said.
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About the author: Mihnea Radu
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Mihnea's favorite cars have already been built, the so-called modern classics from the '80s and '90s. He also loves local car culture from all over the world, so don't be surprised to see him getting excited about weird Japanese imports, low-rider VWs out of Germany, replicas from Russia or LS swaps down in Florida.
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