Toyota shares lag on US output cuts, recovery
The planned shutdown at its Kentucky and Texas plants for a total of at least 11 days comes less than two weeks after Toyota estimated a 100,000-unit sales hit worldwide in the financial year to end-March from the fallout from a recall of millions of cars.
On Tuesday, US regulators added to its woes by opening an investigation into whether Toyota had acted in a timely fashion to recall cars for acceleration problems.
The probe by the National Highway Traffic Safety Administration could lay the groundwork for officials to fine Toyota if they determine the manufacturer violated its legal obligations.
It also sets the stage for a congressional review of Toyota's safety crisis set for next week, at which Toyota President Akio Toyoda may be called to testify.
Shares of Toyota were up 0.3 per cent at 3,390 yen at 0400 GMT, while rivals Honda Motor Co and Nissan Motor Co gained more than 3 per cent as the dollar recovered to above 90 yen.
Toyoda, who faces one of the company's deepest crises just seven months into his job, is due to hold a news conference at 5 p.m. (0800 GMT) in Tokyo to brief on the progress of the recall of Prius and other hybrid models for braking problems.
Toyota had suspended production of the Sai and Lexus HS250h hybrid models, which carry the same software glitch, but is set to resume output on February 22, unit Toyota Motor Kyushu said. Lost production, from February 13 to 22, would amount to 2,500 units.
During the first week of February, Toyota had also halted North American production of eight models covered by a recall for potentially sticky accelerator pedals. That production halt covered six plants in the United States and Canada.
SALES OUTLOOK EYED
Analysts said they would be looking for any guidance on Toyota's outlook for sales as the latest production cutbacks throw further doubt on the pace of its earnings recovery.
"There's no question that sales are suffering (in the United States)," said Mamoru Kato, analyst at Tokai-Tokyo Securities.
"They've estimated a 100,000-unit impact for this financial year. If this multiplies to several hundred thousands next (financial) year, that could lead to a year-on-year fall in sales, and a big hit to earnings," he said.
Toyota is already suffering from declining sales in the United States, its biggest and usually most profitable market, as the recall of more than 8.5 million cars worldwide since late 2009 for three separate defects has damaged its reputation as a quality leader.
Toyota's US sales dropped 16 per cent in January to the lowest level in more than a decade after it suspended sales of about half its inventory of vehicles including the popular Camry and Corolla sedans due to potentially sticky accelerator pedals.
Some said they saw limited direct damage from the US production cuts announced on Tuesday, and that the bigger concern was to Toyota's image as US regulators address the possibility of any wrongdoing by the automaker.
"Reduction of estimated output of a little over 10,000 vehicles would have only a limited impact, while the move shows Toyota's careful efforts to minimise the impact of a drop in sales and a rise in incentives," said Nomura Securities analyst Shotaro Noguchi.
"I can at least say that the news conference today by Toyoda following his first public explanation on recalls last week shows that Toyota has finally begun trying to address the concerns of its stakeholders," he added.
Keep up with the latest business news from the region with the Emirates Business 24|7 daily newsletter. To subscribe to the newsletter, please click here.
Follow Emirates 24|7 on Google News.