Toyota Motor Corp., confronted with its first U.S. sales slump in 13 years, will further cut North American production and may offer fewer model versions to lower costs.
Assembly work at the Toyota City, Japan-based company's U.S. and Canadian plants will be suspended on Dec. 22, extending a scheduled Christmas-New Year closure by two days, spokesman Mike Goss said in an interview yesterday. Sienna minivan output in Indiana will be cut in half in January and production at one of two Georgetown, Kentucky, factory lines will be slowed, he said.
Sagging U.S. demand for large pickups and sport-utility vehicles led Toyota in August to halt production of Tundra pickups in Texas and Indiana for three months. U.S. sales for Asia's largest carmaker have fallen 12 percent this year through October as the economy weakened, gasoline prices rose to a record and the credit crunch reduced consumer access to loans.
``Toyota is not profitable in North America this year,'' said Sean McAlinden, chief economist for the Ann Arbor, Michigan- based Center for Automotive Research said yesterday.
Toyota is adjusting to a U.S. market that may fall to as few as 13 million new vehicles this year and even lower in 2009, Irv Miller, group vice president of corporate affairs for the company's U.S. sales unit, said at a conference in Los Angeles yesterday. The company hasn't had an annual U.S. sales decline since 1995.
While no full-time employees will be laid off, the company will eliminate ``half or more'' of 500 temporary workers at the Georgetown plant during the first three months of 2009, Goss said.
Production Cuts
Toyota is ``studying'' past worker furloughs by U.S.-based automakers and may eventually announce similar layoffs, McAlinden said.
Last week, the company said it would indefinitely cut one of two Tacoma pickup production shifts at New United Motor Manufacturing Inc., a joint venture factory in Fremont, California, Toyota shares with General Motors Corp.
Assembly of Tacomas will continue normally at a factory near Tijuana, Mexico, as Toyota is required by that country to meet an annual production goal of 50,000 vehicles, Goss said.
Toyota built 1.29 million cars and light trucks at North American plants this year through October, down 7.2 percent from 1.39 million a year ago.
`Simplifying' Models
To reduce costs and complexity, the company is considering options such as making fewer versions of some models.
``We are looking at everything right now,'' Miller said. ``Perhaps instead of 17 Camry variations, we go to three,'' he said, adding that there are no specific plans to alter the Camry line.
Miller said ``simplifying'' Toyota's lineup might be patterned after its Scion brand, with standard base models and several custom option packages. ``We are looking to make it easier for our dealers and easier for customers to buy a vehicle,'' he said.
