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UPDATE 3-Toyota to restart output at one more Japan plant
April 6, 2011 / 8:15 AM / 7 years ago

UPDATE 3-Toyota to restart output at one more Japan plant

* Toyota unit Central Motor to produce 2 models from Monday

* No restart of most Japan plants next week: Toyota

* Moody’s puts Toyota on review for possible downgrade

* Toyota: lost production of 260,000 units through this week (Updates with plans to restart output of two more models)

By Chang-Ran Kim, Asia autos correspondent

TOKYO, April 6 (Reuters) - Toyota Motor Corp will begin making two more car models on April 11, taking another small step towards normalising operations after a massive earthquake in Japan disrupted its supply chain and forced most of its factories to halt work.

But the world’s largest automaker denied a report that most of its idled domestic factories would restart next week and has also warned that supply disruptions were likely to interrupt vehicle assembly at one or more of its North American factories at some point. [ID:nN05120553] .

Analysts expect a full recovery of vehicle production at Japanese automakers to take at least a few months. Production could be disrupted again in the peak power consumption season in the summer after a post-quake tsunami crippled a nuclear power plant of Japan’s biggest utility, Tokyo Electric Power .

Toyota will have lost potential output of 260,000 vehicles as of April 8 -- equivalent to 8.4 percent of initial domestic production plans for this year -- over an unprecedented 20-day suspension at most factories since March 14. Toyota and Lexus cars are built at 18 group-wide factories in Japan.

It said on Wednesday it would begin producing the Corolla Axio and Raum models at a plant in Sagamihara, south of Tokyo, run by subsidiary Central Motor.

Central Motor was scheduled to close that factory at the end of March and transfer production to a new site in Miyagi prefecture that had been inaugurated less than a month before being hit by the magnitude 9.0-earthquake on March 11. [ID:nTOE71E023]

Toyota restarted limited production of three hybrid models, the Prius, Lexus HS250h and Lexus CT200h, on March 28 at the Tsutsumi factory in central Japan and a subsidiary’s plant in Kyushu, southern Japan.

Before the news, Toyota shares ended up 0.2 percent at 3,265 yen, erasing losses during most of the session.

The disruptions have prompted Moody’s Investors Service to say it may cut Toyota’s c redit rating . It cited Toyota’s relatively high dependence on the Japanese market, which could be hit by weak consumer sentiment, in placing the Aa2 long-term senior unsecured and issuer ratings under review.

While Toyota’s factories have not suffered major damage, the disaster has disrupted shipments of key components and “normal production cannot be expected for many months”, Moody’s said in a statement. It said a rating cut of multiple notches was unlikely, given the company’s strong balance sheet.

Among other major Japanese automakers, Honda Motor Co has said it aims to restart production at all domestic plants next Monday at a rate of about half its original plans.

Nissan Motor Co plans to resume normal production with parts procured from suppliers, rather than using inventory, from mid-April at limited operation levels.

Damage to facilities at suppliers ranging from Japanese chip maker Renesas Electronics Corp to German chemical company Merck KGaA has affected production at a wide range of automakers including General Motors Co and PSA Peugeot Citroen . (Additional reporting by Nathan Layne in Tokyo and Kavyanjali Kaushik in Bangalore; Editing by Michael Watson)

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