By on May 11, 2020

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]

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17 Comments on “Report: Toyota to Throttle Back Production Through October...”


  • avatar
    NormSV650

    Hertz and others are returning and canceling their rental car orders…Toyota has no were to run and dump now!

  • avatar
    tomLU86

    The first company to publicly state what it is doing.

    They are taking a logical stab at the future.

    The others will follow.

    Regardless of what one thinks of the styling of some of their products, and the excitement, or lack thereof, this is just one more proof that Toyota is the best-run automaker.

    Gas/electric hybrids are probably the best privately owned vehicle solution for our ‘changing world’. And who does the best ones? Who’s done it longest?

    GM had the brilliant Volt, but couldn’t make a commercial go of it.

    Toyota is also the official car of the NY Yankees; has been since the 1970s.

    Barring some other unforeseen event (other than COVID-19 crisis we are living through), Toyota will be numero uno—by itself–by 2030, if not sooner

    • 0 avatar
      Peter Gazis

      tomUl86

    • 0 avatar
      NormSV650

      Allot of sense facts…

      GM made more profits the last few months with trucks and large SUVs that Toyota doesn’t have or no one wants of theirs. When you are stuck selling economy cars that the normal demographic cannot afford and your fleet quicky-sales outlets have dried up. It is time to lay off some temporaries….

  • avatar
    gasser

    Every automaker has the same issues to face: rental agencies have very little business and are not buying any more cars. Additionally they are moving to sell late model, sometimes low mileage inventory. The new car dealers are not exactly swamped with buyers, and many of those will find that their FICO score is no longer attractive to lenders and that their current ride is worth a lot less than they thought.
    We will be returning to an era like 2008-2009, where buyers can find deals on the lot, if the buyer is willing to be flexible in things like color and equipment, or perhaps to consider a low mileage used car. This will allow new car dealers to stay in business with a lot smaller inventory, and save on their cost structure.
    If the banks put Hertz into bankruptcy, I fear that all bets are off for used car prices and that there will be great downward pressure on new car sales.
    I see the pendulum swinging toward “I’ll put a few $ in the old one and fix it” instead of “let’s trade it on something newer”, mainly because paid for vehicles won’t be in danger of repossession if/when things get worse.
    20 to 30 million unemployed is very hard to wrap your head around.

    • 0 avatar
      Scoutdude

      Not every automaker has the same level of rental fleet sales. Toyota loves to dump Corollas and Camrys to meet sales goals. Nissan and FCA will also be hurting more than most.

  • avatar
    CKNSLS Sierra SLT

    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.

    • 0 avatar
      DenverMike

      36 BILLION does sound impressive, but for perspective, Ford is at 30 billion in cash reserves and GM at 29 billion.

      Keep in mind Toyota sells in 170 countries, and a shocking number are in the 3rd world. That’s gotta be unsettling even for the world’s best run automaker.

      • 0 avatar
        CKNSLS Sierra SLT

        DenverMike-

        Ford has borrowed most of that 30 billion that is in cash.

        “The company today notified lenders that it will borrow the total unused amounts against two lines of credit: $13.4 billion under its corporate credit facility and $2 billion under its supplemental credit facility. The incremental cash from these borrowings will be used to offset the temporary working capital impacts of the coronavirus-related production shut downs and to preserve Ford’s financial flexibility.”

        https://media.ford.com/content/fordmedia/fna/us/en/news/2020/03/19/ford-takes-action-to-address-effects-of-coronavirus-pandemic.html

        • 0 avatar
          DenverMike

          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.”

          canada.autonews.com/automakers/ford-warns-us2-billion-quarterly-loss-it-seeks-more-cash

          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.

  • avatar
    SCE to AUX

    “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.

    • 0 avatar
      Scoutdude

      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.

  • avatar
    tomLU86

    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….

  • avatar

    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.

    • 0 avatar
      RHD

      If Toyota gets serious about electric vehicles, like VW supposedly is, then Tesla will be in serious trouble.
      If a gas-powered Camry can easily last 300K+miles, imagine what an electric Camry could do.

      • 0 avatar

        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.

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