A source familiar with its production plans said Toyota plans to curb daily vehicle output in Japan by 15 % in April from a year earlier as it adjusts for a dampening of demand from a national sales tax rise.
The tax hike to 8 from 5 % is widely expected to spur a pickup in consumer spending before it goes into effect on April 1, followed by a temporary slump when it kicks in.
The tax increase, engineered by the previous opposition administration but given final approval by Prime Minister Shinzo Abe and urged by IMF officials and global credit ratings agencies, aims to rein in Japan’s huge public debt even at the risk of slowing the economy in the short term.
Toyota plans to manufacture around 12,200 vehicles a day in the month of April, down 15 % from a year ago. In January, the world’s biggest carmaker has planned daily production up 4 % year-on-year while February and March output are planned to rise 3 %, the person added, speaking on condition of anonymity because the production plans are not made public.
The Nikkei business daily reported that Toyota planned to make around 12,000 vehicles daily in Japan in April. Toyota announced last week that it would trim full-year production in Japan this year by 6 percent to 3.15 million vehicles. Toyota executives have also said that a decline in sales following the tax hike would be inevitable.