Toyota to cut India output by 70% due to parts shortage

Lack of parts compelled Toyota to minify Indian output by 70% ! Similar problems faced by other Japanese Company! The biggest calamity till date in form of earthquake and tsunami which hit Japan last month, not only affected Japan but it affected the whole world economy as the disaster was very destructive. Because of this, Japan's Toyota Motor company will be cutting its exposure at Indian auxiliary by upto 70% . This subsidiary will take place between April 25 and June 4.

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During this period, the Banglore-based Toyota Kirloskar Motors which is a joint venture between Toyota and Kirloskar group will not be operating on Mondays and Fridays to compensate the shortage. There will be a revenue loss of about 500 crore from the Indian subsidiary as the reorganized leading plan of Japan Toyota motors will produce 7,000 less vehicles a month. This will be a big loss as the world's largest automobile industry produces 11,000 units a month at its JV,in which it holds 89% equity

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Toyota Kirloskar Motor's deputy MD (marketing) Sandeep Singh assuring the share holders said "It is a temporary measure to adjust production as per the supplies from our overseas locations. Based on the availability of components in future, we will chalk out our future strategy." In India, Toyota is producing Toyota Innova which can accommodate 8-10 people and is a luxury car. It is also producing Toyota Corolla Altis, SUV Toyota Fortuner and Toyota Etios which is sedan car. Due to this amendment in production policies and scarcity of parts, these cars will now not be available easily and will have a long waiting period.

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Other Japanese Automobile companies are facing the similar problems because of lack of parts. Suzuki and Honda companies in Indian are anticipating similar problems in getting the critical parts from their own country. As per the statement made by Mr. Singh, the company will extend the waiting period of existing models by one month. For now the waiting period is of 1 to 3 months. Although Honda has a stock of some cars till May like Honda Siel Car is expecting to meet the demands of people till May, after this their production will go slow as the stock of critical parts may end..

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"We are looking at possible options to get over any kind of crisis, but some of the components sourced directly from Japan may interrupt regular production in future," a company spokesperson said. Maruti Suzuki in India which is operated by Japanese Suzuki, also may go through the problem of tier-II supplies.