Toyota: Good News, Bad News In Earthquake Recovery

May 24, 2011

The good news for Toyota is vehicle production is getting back to normal following the March 11 earthquake and tsunami. The bad news for this Japanese auto maker is consumers are staying away from its dealers because the media has been so successful in covering the company’s reduced vehicle production, low inventories, and higher prices in a post-earthquake world.

The good news

Initially, Toyota focused on getting back on track at vehicle assembly plants in Japan and North America. That effort succeeded better than anyone initially thought possible. According to Business Times, Toyota has just told its dealer network they have a 45-day supply of vehicles in the U.S. This compares to a 50-day supply for the company just a year ago, and before the natural disasters in Japan.

The company recently announced that it hoped to achieve 70 percent of normal vehicle production next month at assembly plants in the U.S., Canada and Mexico. This is up from just 30 percent in May. A deeper look at these numbers reveals that Toyota now expects that eight of its North American-built models, including the Camry and Corolla, will return to full production in June. 

The bad news

Toyota has been so resilient in its recovery from the devastating earthquake in Japan that its current challenge is to counter media coverage that has driven down consumer demand for its vehicles. The Business Times article quoted a Toyota executive as saying that the company is now aggressively attempting to get the word out that they are “open for business.”

Toyota has not only forecast a full return to production for all models and factory lines by the end of the year, but it may reinstitute incentives for a number of popular models that are forecast to soon have excess supply.

[Business Times]

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