Toyota Kirloskar to suspend production temporarily

Toyota Kirloskar Motor which makes the Etios compact, the Corolla and the Fortuner vehicles, on Friday said it would suspend production on Mondays and Fridays between April 25 and June 4 because of supply constraints.

Terming it as “temporary production adjustments,” a press statement from the company said the decision follows supply difficulties, following the March 11 earthquake and tsunami that devastated Japan.

Production

The supply issues would mean both plants would work at about 30 per cent of the current levels of production. The first plant, at present, produces about 6,000 vehicles a month, while the second plant which makes the newly launched the Etios compact, produces about 4,000 vehicles a month.

These constraints will cumulatively lead to some revenue loss, an official with the company said

The official also said reduction in production would not mean that any of the workers would be retrenched.

In fact, some of the workers will be deployed for CSR activities and some others for retraining their skills. The company employs about 4,800 workers in both the plants.

For the last fiscal, Toyota Kirloskar posted revenues of about Rs 7,000 crore. For 2010 calendar year, the company sold about 84,000 vehicles.

Spare parts supply

The statement, however, said there will be no impact on the company's service and spare parts supply operations.

The company's Managing Director, Mr Hiroshi Nakagawa, said, “It is important to note that this is a necessary response to a short term supply issue and we intend to restore the normal operations as soon as possible. Our focus is on ensuring optimum stock management to reduce the impact on our customers from the immediate production shortfalls.”

The company's Deputy Managing Director, Mr Sandeep Singh, said, “It may be difficult to avoid the inconvenience caused to our customers, and we deeply apologise for the same. We will try to minimise any delivery delays.”

Honda studying impact

Our Mumbai Bureau reports: With most automakers sourcing from a common pool of component vendors, other Japanese carmakers in India may also be impacted by the parts shortage.

Honda Siel, which manufactures cars like the City and Jazz at a plant in Greater Noida, said that the company will soon have clarity on how much its local production will be affected.

“We're still evaluating the parts supply situation. There will be some impact … we will get to know soon. However, we have some parts in transit and in our inventory at the moment,” said Mr Jnaneswar Sen, Senior Vice-President, Sales & Marketing, Honda Siel Cars India.

In Japan, Honda had shut down the Suzuka and Sayama plants between March 11 and April 11, after which production had resumed at half the earlier levels.

We're fine: Maruti

However, Maruti Suzuki said that it may not face any major issues because of the high levels of localisation for the many models that it makes in the country.

The market leader manufactures about seven small cars, besides two sedans at its four plants in the Gurgaon-Manesar region.

“We're getting weekly updates from Japan on the status of parts supply. Up till May-end, we are fine. We have also gone in for alternate supply from countries like Germany and Thailand,” said a top Maruti official.

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