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Further Production Cuts at Toyota and Honda

No clear end in sight in wake of Thai flooding.

by on Nov.07, 2011

The Thai flooding could impact the launch of new Toyota vehicles like the next-gen Lexus GS.

Both Toyota and Honda acknowledge they will have to make further cuts in production in the wake of the disastrous flooding that has savaged Thailand.  The two makers source a number of key components – especially microprocessors and other electronic goods – from the Southeast Asian nation, which has been hammered by some of the worst flooding in decades.

Toyota announced today it will reduce production at its Japanese plants by 30% this month due to parts shortages, with additional cuts being made in the U.S. and other plants around the world.

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The cuts come at a particularly bad time for both Toyota and Honda.  The two makers collectively lost more than a million units of production due to the earthquake and tsunami that struck Japan on March 11 leading to an earlier shortage of critical parts and components.


Toyota Cutting Production – Again – Due to Thai Flooding

Another setback for maker’s ambitious turnaround plan.

by on Nov.03, 2011

The production cuts will likely make it more difficult to find the new 2012 Toyota Camry.

Toyota’s ambitious turnaround plan is in for another setback, the maker issuing a terse news release indicating it will be forced to trim U.S. production due to parts shortages caused by flooding in Thailand.

The announcement comes just days after Honda revealed it will also have to slash production on its North American assembly lines due to flooding that has put much of Thailand underwater – drowning not only the big Honda assembly plant near Bangkok but a number of that country’s key automotive suppliers.

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“Flooding in Thailand continues to necessitate adjustments in Toyota’s production hours,” Toyoda said in its statement.  “To conserve the affected parts, all North American vehicle assembly plants will suspend overtime the week of November 7.”

While the production cuts at Toyota appear to be modest they couldn’t come at a worse time for the maker which lost more than 700,000 units of production worldwide since spring due to the earthquake and tsunami that devastated Northeast Japan.


Honda Planning Major Redesign of New Civic

Subcompact hammered by critics.

by on Nov.01, 2011

Honda will race a redesign of the much-criticized new Civic to market ASAP.

It has not been a very good year, according to John Mendel, Honda of America’s top U.S. executive. Not only has the maker been hammered by a series of production cuts – the latest the result of flooding in Thailand – but one of its most important products has received a critical drubbing from the media and a tepid response from potential buyers.

That will send the maker’s designers and engineers back to work to come up with a significant “refresh” of the 2012 Honda Civic, reports Automotive News, which should be ready to go to market in time for the 2013 model-year.

“We take feedback seriously, regardless of who it’s from, and we will act accordingly quickly,” John Mendel, American Honda executive vice president, said in an interview in San Diego, where the maker is revealing another critical new model, the 2012 Honda CR-V.

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Suggesting the maker is “appropriately energized,” Mendel said Honda is hoping to act as quickly as possible to address criticism of the latest-generation Civic.  The question is how much can be done in short order.  The 2012 version of the compact Civic was the result of a 6-year gestation and normally Honda spends at least three years to develop a mid-cycle update.


Honda Cutting U.S. & Canadian Production By Half – Likely Delaying CR-V Launch

Maker hammered by devastating floods in Thailand.

by on Oct.31, 2011

Honda may have to push back the launch of the new CR-V crossover, it says.

Ever so close to getting production – and inventories — back to normal after suffering for months from the impact of Japan’s March 11 earthquake and tsunami, Honda has announced it will once again have to slash production by half due to flooding in Thailand. The launch of the new 2012 CR-V crossover, traditionally the compact segment’s best-seller, “could potentially be delayed,” meanwhile, the maker said.

The worst floods in decades have crippled not only a key Honda assembly plant in the Southeast Asian nation but at least 10% of its Tier-One and numerous other parts manufacturers.  That includes makers of microprocessors — critical components that were also rendered in short supply following the March disaster that crippled the primary plant of Renesas, the world’s largest producer of automotive microcircuits.

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“It is anticipated that this situation will require adjustments for the next several weeks, the maker said in a press release, noting all six assembly plants in Canada and the U.S. will be affected.  Though significantly shorter than the six-month impact from the Japan quake and tsunami it is a nonetheless serious setback, leading Honda Chief Financial Officer Fumihiko Ike to lament that, “To put it bluntly, we’re in a really tough spot.”


Honda Profits Tank, Maker Hints at Further Troubles Ahead

Japanese maker withdraws sales guidance for rest of year.

by on Oct.31, 2011

Shortages of the 2012 Honda Civic were a significant drag on the maker's earnings.

Honda saw profits for the second quarter of its fiscal year plunge by 68%, well beyond what analysts had been anticipating – and the maker is hinting the situation may not improve as quickly as it originally anticipated.

Honda had been hoping to begin a much-anticipated turnaround as it finally got its plants back up to speed in the wake of the March 11 Japanese earthquake and tsunami. But the maker is warning it now faces another serious setback as the disastrous floods in Thailand knock a critical plant out of action.

“To put it bluntly, we’re in a really tough spot,” said Honda Chief Financial Officer Fumihiko Ike,” during a briefing on the second quarter results.  “We’re in a much more difficult position because our car factory is inundated.”

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While the maker’s U.S. dealers do no market any vehicles sold in Thailand, that doesn’t mean Honda of America is out of the woods.  The loss of the Thai plant could have a significant global impact, as it produces parts and components used at Honda plants around the world.  Making matters worse, about 10% of Honda’s Tier-One suppliers in Thailand have also been flooded and so have others down the supply chain.