Toyota to suspend production in China next month




September 26, 2012 Tweet
THE ASAHI SHIMBUN



Toyota Motor Corp. plans to effectively halt its production in China in October because of the backlash there over Japan's decision to put three disputed islands in the East China Sea under state ownership.

Toyota will review the decision after the situation calms down, sources said, referring to, among other issues, demonstrations that have flared in dozens of cities over the Senkaku Islands issue.

The auto giant will provide Chinese workers with minimum levels of work to maintain employment, the sources added.

The company will also stop all vehicle exports from Japan to China, including its high-end Lexus models, the sources said.

Toyota told its main business partners that it has set production plans in China at zero for October. Some 78,000 vehicles rolled off its assembly lines in China in October 2011.

Toyota's vehicle production in China totaled about 800,000 units last year. It sold some 880,000 vehicles there, including those made in Japan.

The halt in production also takes into account the possibility of delayed parts supply from Japan, with customs checks in China being tightened.

Toyota also plans to adjust its inventory in October as growth in the Chinese market is slowing.

Production in China traditionally slows in October because of a long holiday period centered around China's National Day.

The territorial dispute is also affecting Toyota’s output in Japan.

The company said Sept. 25 it will cut production at a subsidiary, Toyota Motor Kyushu Inc., by around 20 percent. Lexus models for the Chinese market will be most affected.

Toyota said the cut will continue for the time being because its sales in China have fallen due to the violent anti-Japan protests there.

Toyota sold about 53,000 Lexus vehicles in China in 2011, most of which were produced by Toyota Motor Kyushu, according to research company Fourin Inc.