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Toyota Delaying Launch of Prius V, Preparing to Shut Some U.S. Plants

Parts shortages worsen in wake of quake, tsunami, nuclear disaster.

by on Mar.24, 2011

Toyota CEO Akio Toyoda with the Prius V hybrid during the Detroit Auto Show preview of the microvan.

Still struggling to get its Japanese plants up-and-running, Toyota has now delayed the planned April launch of its all-new Prius V.  The maker has also warned workers it may soon be forced to temporarily idle some of its North American assembly lines.

The hybrid microvan was to begin the roll-out of an all-new brand-within-a-brand sharing the familiar Prius badge that currently graces the world’s most popular hybrid-electric vehicle.  At last January’s Detroit Auto Show, Toyota revealed several models that will also be badged Prius, including both the V, a smaller Prius C, and a plug-in hybrid based on the current Prius sedan.

But the home market roll-out of the Prius V is being delayed indefinitely as a result of the worsening shortage of Japanese-made parts.  Toyota plants in Japan have been out of operation since March 11, when the island nation was slammed by a devastating 9.0-magnitude earthquake and subsequent tsunami.

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The natural disaster damaged or destroyed a number of component plants and disrupted roads and rail supply lines.  Complicating matters, the crisis Fukushima Dai-ichi nuclear plant has created an energy shortage that has made it difficult to operate even those factories not directly impacted by the quake and tsunami.

Toyota officials continue to delay the restart of their Japanese plants and have meanwhile trimmed back production at their “transplant” North American assembly lines.  The maker is now advising workers here that some plants may need to be completely idled until the flow of Japanese parts can be resumed — or alternative sources found.

The Japanese shutdown has already resulted in the loss of an estimated 140,000 to 150,000 vehicles for Toyota.  The crisis is particularly problematic for specific models, including those sold under the Lexus and Scion brand which, like the current Prius sedan, are produced only in Japan.  The 2011 Prius was already in short supply, demand rising sharply as a result of the surge in fuel prices.

Company officials have said it is too early to tell whether the delay in the Japanese launch of the Prius V will be mirrored in the U.S., where the larger hybrid was to have gone on sale by late Summer.

The new model will offer significantly more interior and cargo space than the fourth-generation Prius sedan but still yield an estimated 42 mpg in city driving.

Meanwhile, other Japanese makers are facing their own struggles to restart production.  Honda has also continued delaying its start-up, though rival Nissan is slowly beginning limited production.  That maker, Japan’s second-largest, reports that at least 40 key suppliers are unable to restart operations.

Nissan’s U.S. chief executive, Carlos Tavares, has suggested the maker might have to ship engines from its Decherd, TN plant to Japan to cover for lost production at its Iwaki engine plant there.

Ironically, the only North American plant so far completely idled by the Japanese crisis is the General Motors assembly line in Shreveport, LA.  A GM engine plant in New York has had to cut production.  But industry analysts warn that most automakers will be forced to trim production if the crisis isn’t resolved in a matter of weeks.

A variety of key materials appear to be in short supply, including plastics and rubber, but especially electronic components.  One of the semiconductor manufacturers, Renesas Naka, damaged by the quake provides an estimated 20% of world automotive needs, reports Deutsche Bank, warning that it could take months to bring that factory back up – which could trim several million units of global automotive production out of industry plans for 2011.

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