TOKYO -- Massive flooding in Thailand has forced Toyota to trim U.S. auto output, as the company tries to conserve parts amid supply chain disruptions in the Southeast Asian auto hub.
Toyota cut overtime this week and is eliminating a Saturday shift on Oct. 29 at assembly plants in Indiana, Kentucky and Canada, as well as an engine plant in West Virginia.
"Parts availability from Thailand is not predictable at this time and is changing with the continued severity of the flooding," Toyota said in a statement.
Executive Vice President Shinichi Sasaki warned earlier the company was bracing for crimped supply of such Thai-built components as audio systems, switches, diodes and condensers.
The parts shortages have already shut Toyota's three plants in Thailand and forced production cutbacks in Japan. The next impact may be felt at Toyota's North American plants, he said.
"We don't know how big the impact will be," Sasaki told Automotive News on Wednesday, adding that the company was still assessing the status of the overseas supply chain.
Weeks of severe flooding have inundated Thailand's industrial heartland and crippled the local operations of Japanese automakers that have made the country a major auto-making center.
Thailand's worst flooding in a half-century has already forced Toyota, Honda, Nissan, Mazda and Mitsubishi to suspend local operations -- either because their own plants are damaged or because suppliers' plants have been hit by the rising waters.
The paralyzed supply chain echoes the breakdown faced by Japanese automakers following the March 11 earthquake in northeast Japan. And it comes just as their domestic operations return to normal and ramp up output to make up output lost to the quake.
Sasaki said there are plenty of components still in the pipeline to keep assembly humming at international plants. But he estimated that overseas output in places such as North America will be impacted if the flood disruption in Thailand lasts for more than a month.
Shoring up suppliers
In the meantime, Toyota is trying to shore up the supply chain by asking suppliers in Thailand to source parts from Malaysia and the Philippines when possible, Sasaki said.
Flooding has affected the supply of about 100 parts to Toyota, says IHS Automotive analyst Paul Newton. And from Oct. 10-28, Toyota is expected to lose 37,500 units of production in Thailand.
"Global automakers' reliance on Thailand as a regional automotive parts supply and assembly hub has led to Asia-wide ramifications, with a number of them now likely to alter their supply chains and look for alternative short-term procurement arrangements," Newton wrote in a report.
On Tuesday, Toyota announced it was trimming output at Japanese factories that ship some of the company's best selling exports, including the Prius hybrid, to the United States.
Toyota is eliminating overtime at five Japanese assembly plants from Monday through Friday to prepare for a possible shortage of parts imported from Thailand. Toyota expects to lose 6,000 units of Japanese output.
Toyota had been operating the plants with overtime in an attempt to recoup output lost after Japan's March 11 earthquake shuttered domestic factories for weeks.
The slowdown affects plants producing such vehicles as the Prius, iQ, Land Cruiser, Corolla, Scion tC and RAV4. It also hits plants making the Lexus LS, GS, IS, GX, ES, HS and RX.
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