Toyota, Nissan trim China output in wake of protests

Tue Sep 25, 2012 10:55pm EDT
 
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By Norihiko Shirouzu

BEIJING (Reuters) - Japanese automakers Toyota Motor Corp (7203.T: Quote), Nissan Motor Co Ltd (7201.T: Quote) and Suzuki (7269.T: Quote) are curtailing production in China in the wake of anti-Japan protests that shuttered dealerships and darkened their sales prospects in the world's top car market.

Nissan, Japan's top automaker in China, said it would halt production at a joint venture in China starting on Thursday, three days earlier than planned, and extending through next week's national holiday period.

A Toyota executive in Beijing, who spoke on condition of anonymity, said it was "likely" the automaker would cut output in China in the coming weeks. A Toyota spokeswoman said the company had no immediate comment.

Suzuki, meanwhile, said it had stopped one of two shifts that it normally runs in China.

Production slowdowns are a normal feature of the auto industry in mature markets like the United States, where they are used to keep inventories from ballooning and avoid pressure for automakers to offer deep discounts that erode profitability.

But the steps by the Japanese automakers to cut output in China are an anomaly in a market that has driven the industry's global growth over the past decade and where most automakers had been adding capacity until China's economic slowdown in recent months caused production to outpace sales.

LINGERING RESENTMENT

The latest auto production adjustments come on top of general cutbacks Japanese auto makers had been making prior to the disruptions caused by anti-Japan protests.   Continued...

 
An employee inspects a compact car ETIOS as he trains at the assembly line of the new plant of Japanese automaker Toyota Motor Corporation in Sorocaba, 100km (62 miles) west of Sao Paulo, August 9, 2012. REUTERS/Paulo Whitaker