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Toyota Recalling 500,000 Vehicles

Further setback to maker’s turnaround plans.

by on Nov.09, 2011

The recall covers a wide range of Toyota and Lexus vehicles, including the Camry Solara.

Toyota Motor Co. will recall about 550,000 vehicles – most of them in the U.S. – due to problems that could make the Lexus and Toyota models difficult to steer.

The announcement comes as the latest setback to an automaker that had hoped to end 2011 in full turnaround mode after a lengthy safety and quality scandal followed by sharp production cutbacks due to Japan’s March 11 earthquake and tsunami.  But the latest recall instead comes as Toyota is scaling back production at factories around the world due to flooding in Thailand which has left it short of critical parts.

Production problems and consequent inventory shortages resulted in a sharp, 18.5% decline in Toyota’s earnings for the July – September quarter, the maker announced yesterday. (For more on that story, Click Here.)

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The latest recall brings to 14 million the number of vehicles Toyota has recalled worldwide since it revealed the first of several callbacks for so-called unintended acceleration in October 2009.  The new problem involves a wide range of products, from the Toyota Camry sedan and Sienna minivan to the Lexus RX400h hybrid – more than 80% of which were sold in the U.S.


Toyota Profits Plunge as New Challenges Threaten Future Earnings

Maker withdraws future guidance as parts shortages worsen in wake of Thai flooding.

by on Nov.08, 2011

Toyota CEO Akio Toyoda at the launch of the Lexus GS in Pebble Beach last August.

Toyota reported a sharp 18.5% downturn in its latest quarterly earnings, largely the result of parts and product shortages caused by the earthquake and tsunami that struck northeastern Japan last March.  But the maker warned it is facing new challenges ahead.  On an operating basis, the maker said it lost $418 million for the first half of its fiscal year, compared with a $4.1 billion profit a year ago.

In a presentation from Tokyo, Toyota officials withdrew their earlier guidance for the rest of the fiscal year – which ends on March 31, 2012 – due to the potential havoc the company faces in the wake of the flooding that struck Thailand last month.  That has disrupted supplies of both vehicles and parts, resulting in new production cuts at Toyota plants around the world.

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Further complicating matters, the yen continues to gain strength against the dollar and other major currencies. The current exchange rates are “far beyond what is tolerable,” Toyota CEO Akio Toyoda said earlier in the week, warning that if the trend isn’t reversed Japan’s manufacturing base could be “destroyed.”


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.