Toyota to cut global capacity by 700,000 units

Article by Christian A., on August 26, 2010

As a long-overdue cost-cutting measure, a production line in Japan is being halted by Toyota Motor Corp. as it looks to cut excess global capacity by up to 700,000 units. Nikkei business daily reports that a company source said that although sales in a few countries have been improving, the outlook for global car demand is still uncertain.

Toyota plans to reduce its global capacity by 10 percent, or 1 million vehicles, as early as the current financial year to March 2010. The unnamed source added that Toyota had made no decisions on such deep cuts. The source said that total cuts could reach 700,000 cars, or 7% of Toyota's global capacity.

Possibilities also include a joint venture with General Motors Co. in the U.S. that could be shut down and a production line in Britain that may be halted.

In the wake of the global financial crisis, Toyota has begun restoring some production cuts, as inventories shrink and government stimulus efforts improve sales, but it made no announcement on whether it plans longer-term cuts in factory capacity.

Yoshifumi Tabei, an auto analyst at Kazaka Securities, said that while the production cut is positive for its earnings, there is room for further capacity cuts in the United States and elsewhere.

Toyota was helped by government measures to promote such vehicles and in fact, its Prius hybrid ranked as Japan's top-selling car in July for the second straight month. However, while Toyota has seen a recovery in sales of fuel-efficient cars, it has lagged behind its rivals in cost cutting.

Topics: toyota, production

If you liked the article, share on:

Comments

Recommended

In a game-changing move, Ford has revealed that it will soon produce its first ever all-electric CUV that will be built to be electric from the ground up, and it...
by - May 23, 2017
The wait for the Mustang’s GT-based Super Snake concept to be released is finally over. Shelby had recently collaborated with Ford Performance and Borla to come up with something that...
by - May 23, 2017
While the BMW M3 is making some noise in Abu Dhabi with its San Marino Blue outfit, Porsche on the other hand, is catching people’s attention in Dubai as the...
by - May 23, 2017
We first heard of the fifth generation SEAT Ibiza earlier this year, and last week, the company finally revealed the all-new Ibiza at the international launch in Barcelona. The new...
by - May 22, 2017
The aftermath of the Takata airbag recall still largely resounds in the automotive industry, as big automotive companies like BMW, Mazda, Subaru and Toyota were extensively hit with what is...
by - May 22, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries