(Refiles to fix typo in paragraph 12)
* Japan output to start normalising in July, overseas in
* Expects full recovery in November or December globally
* Lost output of 400,000 units in Japan, 100,000 overseas as
* Renesas restart outlook a "big factor" in outlook
* Encouraging suppliers to consider diversifying output
(Adds analyst comment, details)
By Chang-Ran Kim and Nathan Layne
TOKYO, April 22 Toyota Motor Corp said
it could take until the end of the year before production has
fully recovered to levels before the massive
earthquake and tsunami on March 11 devastated Japan's northeast,
disrupting the supply of key parts.
In the clearest forecast yet of how long it would take for
the Japanese auto industry to recover, Toyota said output would
start to pick up in July in Japan and around August overseas,
with a complete recovery expected in November or December.
Until then, Toyota's domestic factories will continue to
work at volumes equivalent to half of original plans, and at an
average 40 percent outside Japan, the world's biggest automaker
"With this many aftershocks, including one last night, we've
seen some of the recovery work thrown back to square one many,
many times," President Akio Toyoda told a hastily called news
conference in Tokyo on Friday.
"In that sense it's difficult to say what the impact on
production volumes or earnings will be."
The news from Toyota came just hours after Japan's Renesas
Electronics Corp , a major supplier of chips to the auto
industry, said it would resume operations at a damaged factory
north of Tokyo on June 15 -- a few weeks ahead of schedule --
an easing of a key bottleneck for car makers. [ID:nL3E7FM074]
While Renesas -- like Toyota -- stopped short of specifying
at what pace production would ramp up, investors cheered its
announcement, pushing Japanese auto stocks sharply higher to
reverse earlier losses.
The projection from Renesas, which has a 40 percent market
share in automotive microcontroller chips globally, was a "big
factor" in Toyota's gaining more clarity on its own production,
Toyota Executive Vice President Shinichi Sasaki said.
"The market was worried about clarity on how long this could
last, and Toyota provided a degree of that," Deutsche Securities
auto analyst Kurt Sanger said. "It's positive news," he said.
Shares in Toyota ended up 3.1 percent, while Nissan Motor Co
put on 3.6 percent and Honda Motor Co gained
Some said Toyota's forecast could prove conservative in
light of recent signs of factories starting to come back on
line, a fund manager said.
"According to what we're hearing directly from companies, it
looks like the recovery on the ground is faster than
people think, and Toyota may well restart production even
faster than they stated in this announcement," said Tetsuro Ii,
chief executive officer of Commons Asset Management.
RETHINKING PARTS PROCUREMENT
Japanese automakers have slashed production due to the
shortage mostly of electronic and resin-based parts from the
magnitude-9.0 earthquake and the resulting tsunami and damage to
a major nuclear plant that has disrupted power supply.
By the end of this month, Toyota said it will have produced
500,000 fewer vehicles globally than it had initially planned,
with 400,000 units of that in Japan.
President Toyoda said Toyota did not yet know which car
models would be built at what levels in the ramp-up towards the
end of the year.
But he said that giving even a rough sense of timing would
be a help to dealers, who he said could now give customers at
least a vague sense of when they could expect cars to be
The disruption of parts supply in Japan has also affected
car makers overseas such as General Motors Co and Ford
Motor Co , underscoring the complexity, depth and breadth
of the industry's supply chain and the flip side of its lean
"just-in-time" manufacturing system when a part goes missing.
While concentrating production of certain electronic parts
was inevitable for suppliers to compete on the global stage,
Toyota's Sasaki said addressing the risk of supply disruption
was a task for industry as a whole in one of the world's most
Even among the components that Toyota buys locally in
overseas regions, there were secondary parts that originated in
Japan, Sasaki said, causing a bottleneck at less visible levels.
"In light of that, we want to consider encouraging our
suppliers to set up more production sites overseas," he said.
For its part, Toyota's manufacturing chief, Executive Vice
President Atsushi Niimi, said the automaker remained committed
to building at least 3.0-3.2 million vehicles a year in Japan in
an effort to keep the tradition of "monozukuri", or
manufacturing, strong in the country.
(Additional reporting by Antoni Slodkowski; Editing by Edmund
Klamann and Edwina Gibbs)