Honda, Toyota expect to fully recover in 2012 due to Thai floods

Article by Christian Andrei, on November 7, 2011

The floods in Thailand have forced Toyota Motor Corp. and Honda Motor Co. to postpone until early 2012 their plans for factories to operate overtime in order to recover the production loss that was the result of Japan’s earthquake. Toyota has been reducing its output in Japan for a third week now. It’s also the second week that it has suspended overtime in North America for a second week as the floods have spread.

Honda has temporarily stopped overtime at its plants. Its North American plants are running at half capacity until next week as it examines its inventory.

Tracy Handler, a Troy, Mich.-based analyst with IHS Automotive, said that Toyota and Honda can’t expand production as what was planned until the first quarter of 2012. Handler added that both automakers were “really unlucky this year." The floods in Thailand had been the worst disaster to hit the industry since the earthquake in Japan last March had cut Toyota and Honda’s output for five months.

Honda has been forced to discard its earnings forecasts. The Federation of Thai Industries' automotive club said that it’s likely that plants in Thailand will be stopped until December.

Toyota, which is scheduled to report financial results next week, said it hasn't decided on its production plans starting on Nov. 14 as it continues to study the situation.

These two companies are still studying parts supplies and aren't talking about production plans beyond the middle of November, according to Mike Goss, a spokesman for Toyota's North American manufacturing unit, and Ron Lietzke, a spokesman with Honda's factory unit in Marysville, Ohio. [source: BusinessWeek]

Topics: honda, toyota, thailand

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