Thai floods: Toyota extends suspension, cuts output because of parts shortages image

Toyota Motor Corporation on Friday said that it will extend its suspension of auto production in Thailand, and will scale back production in Indonesia, the Philippines and Vietnam because of difficulties exporting some parts from flood-hit Thailand.

The automaker will try to re-open its factories on Oct. 28.

Production at Toyota’s three plants in eastern Thailand stopped on Oct. 10 because the flooding has disrupted the supply of parts. Toyota didn’t give any other details and couldn’t be immediately reached for comment.
Moreover, all Toyota’s dealerships ( ~ 300 ) have stopped sales activities due to the flooding, the company said.

Almost 10 per cent of all auto parts for local production comes from the flood- affected areas, with Ayutthaya and Pathumthani being home to some 40 auto parts providers which supply to the majority of assembly plants in Thailand.

“The effect on sales is still being assessed,” Toyota said.

“Currently, recovery efforts are being made on a company-wide basis based on close observation of the supply chain situation. A decision on (commencing) production from Oct 24 will be based on the situation as it develops,” said Eriko Tsuro, a spokeswoman for Toyota Motor Asia Pacific in Singapore.

The impact of the disaster in Thailand is spreading beyond the country, affecting vehicle production across the region. Toyota follows Honda Motor Co. in cutting back output at its Southeast Asian operations amid disruptions in the parts supply chain because of flooding in Thailand.

Toyota’s Thai plants produced 630,000 vehicles in 2010 including popular models like the Camry and the Corolla.

Japanese automakers — including Toyota, Honda Motor Co. and Nissan Motor Co. — are losing 6,000 units of production daily after halting production since early this month in their Southeast Asian manufacturing hub, the Japan Automobile Manufacturers Association said yesterday.

Losses are estimated to top $500 million a month. GM, which assembles the Fiesta in Thailand has halted car production from October 19 – 22.

Typhoon-driven flooding has whipsawed Thailand since late July, killing more than 350 people, affecting more than three quarters of the country’s provinces and inflicting billions of dollars in damage.