Report: Toyota to Throttle Back Production Through October

Steph Willems
by Steph Willems

Today is Back to Work Day for many North American Toyota workers, with the automaker joining other manufacturers in slowly resuming production following an extended period of pandemic downtime. The process of ramping up won’t be an overnight thing, given considerations related to employee health and market demand.

Indeed, Americans are heading back to dealerships in greater numbers, but Toyota isn’t planning on returning to normal production levels for some time, a source told Reuters. Overall output for the automaker stands to take a major hit.

On May 11th, Toyota plans to resume work at its seven North American production sites. New health measures will be in place, and plants won’t start out with a full complement of workers.

According to a well-placed person, Toyota expects production from April to October to fall 29 percent below last year’s tally for that 7-month span, or 32 percent below its own projections for this year. Total N.A. production for this period will total 800,000 vehicles, the source claims.

Obviously, Toyota cranked out zero vehicles in the U.S., Canada, and Mexico in April, and none for the first part of May. Total production for May is expected to come in at less than 10 percent of last year’s May tally, the source claims, with output not returning to normal until July. Production numbers that exceed last year’s monthly totals is not expected until September.

Toyota’s production shutdown began like the cruise in Gilligan’s Island. Not initially expected to last long, it morphed into an extended idle period that saw continuous re-writes of its projected restart date. Just a couple of weeks ago, the automaker planned to be back in business on May 4th.

[Image: Toyota]

Steph Willems
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  • CKNSLS Sierra SLT CKNSLS Sierra SLT on May 11, 2020

    tomLU86- You are correct. Toyota has 36 BILLION IN CASH RESERVES. They are in a position to come out ahead on this current situation better than any other auto maker.

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    • DenverMike DenverMike on May 12, 2020

      @CKNSLS Sierra SLT The credit lines are on top of the 30 billion. "The company had about $30 billion in cash on its balance sheet as of April 9." "The automaker has already suspended its dividend and drawn down more than $15 billion to ride out the damage to its business from the pandemic." Toyota relies heavily in its global sales of thinly optioned economy cars in the poorest parts of the world, where Lexus doesn't exist. Volume is key here.

  • SCE to AUX SCE to AUX on May 11, 2020

    "32 percent below its own projections for this year" That's pretty close to the 40% market drop I suspected early on. If Toyota is thinking this way, anyone predicting a more rosy outlook will look ridiculous, unless they are in a very bright niche. Toyota's projections are not as much a measure of their own capabilities, but rather a statement about demand. And that's scary.

    • Scoutdude Scoutdude on May 11, 2020

      The problem is Toyota and their line up. They are but bit players in the full size truck market demand of which is holding up quite nicely and heavily invested in selling sedans to rental companies.

  • TomLU86 TomLU86 on May 11, 2020

    Take the relentless cost discipline of General Motors from the 20s thru the 70s (the fiefdom divisions had quite a bit of latitude....provided they delivered their financial result to the mother shop. Failure was not an option. That's why Corvairs didn't have sway bars....) Add the high level of logic as to how to deploy the companies resources. They are followers of Henry Ford II's saying "we don't make cars, we make money". Cars are HOW we make money. Add the fact the the Toyoda FAMILY is actively involved in running the FAMILY asset, not hired managers. Their ancestors built it from the ground up. Honor is involved--in a society where this is a huge deal. Mix in the Japanese tenacity that made them such formidable adversaries in WWII, even though they were hopelessly outgunned by the US military machine And you have Toyota, circa 2020. BTW, I believe GM was the only carmaker that turned a profit during every year of the Great Depression....

  • Inside Looking Out Inside Looking Out on May 11, 2020

    It is a good time for Toyota to start transition from gas powered cars to electric vehicles. If not now then when? California is on its way to declare new gas powered cars illegal and I fully support state government in that respect. State will simply set the mpg and CO2 limits out of reach for ICE vehicles.

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    • Inside Looking Out Inside Looking Out on May 12, 2020

      @RHD Toyota reportedly is working on the new battery technology. Tesla too and for that reason bought Maxwell. But Toyota has to save the rest of Japanese auto industry, small companies like Mazda, Subaru, Nissan, Mitsubishi and etc so it will be distracted for the time being.