Despite Dry Plants, Thai Floods Slow Toyota Production Around The World

Bertel Schmitt
by Bertel Schmitt

Floodwaters in Thailand show no signs of receding, and continue to affect car production in Thailand and around the world. Toyota’s three Thai plants in Samrong, Gateway and Ban Pho are dry. They have been shut down for a lack of parts since October 10, and the closure will continue at least through November 12, Toyota says in a statement.

Meanwhile, the parts shortage causes “production adjustments” (read unbuilt cars) in Toyota plants elsewhere. Reduced shifts, in place in Toyota plants in Japan since October 24, will be extended through November 12, “based on an ongoing assessment of the parts supply situation at each individual production line.” Production plants in the United States, Canada, South Africa, Indonesia, the Philippines, Vietnam, Pakistan and Malaysia will adjust production for the week starting November 7.

Says Toyota: “A decision on production from November 14 onward will be made based on an assessment of the situation as it develops.”

The Nikkei [sub] says that so far, Toyota has lost 69,000 units not produced in Thailand and 22,000 units not produced in Japan. Other Japanese carmakers which source parts in Thailand see their production similarly affected.

Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href=""> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href=""> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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  • VelocityRed3 VelocityRed3 on Nov 04, 2011

    Unrelated to cars, but related to this post. This flooding has also caused hard drives prices to increase up to 40%, in some cases.

  • Alluster Alluster on Nov 04, 2011

    Bertel, thank you for the continued coverage on production stoppages. How do you this this would affect Toyota? Toyota owns the market in Thailand, Japan and pretty much all of SE Asia. So are there any real effects due to production cuts or do you think the sales are only deferred? I expect Toyota to have a gang busters year in 2012. There is so much pent up demand in markets where Toyota is really strong, they might actually outsell GM and VW next year. Also when anyone says production losses, they are only comparing to the previous year and not really including loss of potential growth. For eg when they say Toyota lost 10% of their production YTD, in a market that has gone up by 10%, haven't they actually lost 20% production.

    • Th009 Th009 on Nov 06, 2011

      Potentially, yes, but it's really impossible to measure lost growth that might or might not have been. The impact of the pent-up demand will depend on the recovery in Japan and in Thailand, not just of the manufacturing but also of the economy.

  • Orthorim Orthorim on Nov 06, 2011

    It's strange to see that the car manufacurers have so many inter-dependencies. They seem to work with zero redundancy. Maybe time to change that?