Earthquake Update: Toyota, Honda Production Down 62 Percent

Extended production delays in the wake of the March 11 earthquake and tsunami may cause Toyota to lose its spot as the world’s largest automaker. According to Reuters, the Japanese company is expected to slip to third place in the global auto industry.

Toyota plants in Japan are operating at just 50 percent capacity, and those in the U.S. at 30 percent capacity, due to parts shortages and damaged facilities. Production of Toyota vehicles in Japan is down 62.7 percent year-over-year, and down globally 30 percent, according to Reuters.

Analysts reportedly expect GM to build about 8 million vehicles this year, followed by Volkswagen with 7 million -- which will make them the first and second-largest automakers, respectively, for 2011. Investors also expect that South Korean companies Kia and Hyundai will stand to gain from the shortage of Toyota vehicles.

Honda said that its production levels in Japan will remain at 50 percent of normal levels until the end of June. The company hopes to resume normal production schedules “before the end of 2011,” noting that it will update its plans based on the recovery of Honda facilities and suppliers. Reuters reports that Japanese Honda production is down 62.9 percent, with global Honda output down 19.2 percent year-over-year.

Honda says that U.S. sales won’t be affected as significantly, because almost 80 percent of Honda vehicles sold here are built on American soil. However, supply disruptions have caused temporary slowdowns at some American factories. Vehicles built primarily in Japan will experience shortages, including the Honda Civic hybrid, CR-Z, Fit, Insight, Acura TSX, and Acura RL.

The only company suffering worse production losses in Japan was Fuji Heavy Industries, which produces Subaru vehicles. According to Reuters, FHI’s domestic production last month was 64.9-percent lower than in March 2010.

Sources: Reuters, Honda

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