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Toyota plans to further slash US production
(Agencies)
Updated: 2008-11-20 08:10
Toyota Motor Corp will further trim North American production and Nissan Motor Co said second-half profit will fall to "zero" as a recession pushes US vehicle sales to the lowest annual tally in 15 years. Toyota, heading for its first drop in US sales in 13 years, will extend the Christmas-New Year closure at its US and Canadian plants by two days and make other cuts, spokesman Mike Goss said in an interview on Tuesday. Nissan Chief Executive Officer Carlos Ghosn made the profit forecast in a Wall Street Journal interview, confirmed by company spokesman Simon Sproule. Nissan and Toyota have cut their annual profit forecasts by more than 50 percent because of the yearlong industry-wide slump in the US, the world's largest auto market, and waning demand in Japan and Europe. The value of overseas sales is also being eroded by the yen's 16 percent gain against the dollar and 34 percent rise against the euro this year. For Nissan, "there's a possibility of a loss in the second half, depending on what happens with the currency and sales," said Koji Endo, a Tokyo-based analyst at Credit Suisse Securities (Japan) Ltd, who rates the company "underperform." Last month, Nissan forecast second-half net income of 33.7 billion yen ($348 million) and operating profit of 78.4 billion yen. The company expects full-year net income of 160 billion yen, a 67 percent drop from the year earlier. "We are working toward meeting the profit target" given on Oct 31, Chief Operating Officer Toshiyuki Shiga told reporters yesterday in Tokyo. Nissan dropped 2.8 percent to 346 yen at the close of trading in Tokyo. Toyota was unchanged at 3,050 yen. Toyota's production cuts also include reducing Sienna minivan output in Indiana by half in January and slowing one of two Georgetown, Kentucky, factory lines, Goss said. 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, he added. Toyota, Japan's biggest carmaker, predicted annual net income of 550 billion yen on Nov 6, a 67 percent decline from a year ago. The credit crunch has crippled US vehicle sales, forcing General Motors Corp, Ford Motor Co and Chrysler LLC to seek a combined $25 billion in US government loans as they burn through cash.
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