Toyota and Honda cut production again

Japan's two biggest carmakers today announced further production cuts as they struggle to make a dent in their inventories amid a collapse in global demand. Toyota said it would cut production in North America by about half in the coming months, while Honda said it would slash output in Japan in response to a catastrophic sales slump. "In addition to slowing production we are redoubling efforts to cut costs at each of our facilities," Jim Wiseman, vice president of external affairs for Toyota Motor Engineering and Manufacturing North America, said in a statement. Toyota's North American plants have a 90-day supply of vehicles but hope to cut that by about half in the second quarter of this year, the firm said. "Further actions and sacrifices may be necessary, but we will continue to do everything possible to assure the viability of our plants and protect the long-term employment security of our team members," Wiseman added. Toyota is to halt production at all 12 of its Japanese plants for 11 days in February and March and lay off thousands of temporary workers. Sales in the US, Toyota's biggest market, have plummeted in recent months, falling by 37% in December, and the firm is bracing itself for its first operating loss in 70 years for the year ending in March. "The current inventory level is a record high for Toyota, though the market slump is unprecedented so rising inventories are unavoidable," Okasan Securities analyst Yasuaki Iwamoto told the Associated Press. "Sales are falling 30%-40% every month, and this pace of fall is unheard of for either Toyota or the overall industry. Automakers have to cope with it through production cuts as quickly as possible."Honda, meanwhile, said it would cut production in Japan by a further 56,000 vehicles in a move that will affect all of its domestic plants and models. The firm, Japan's second biggest carmaker after Toyota, had already cut domestic production three times in the past year. The announcements came a day after Nissan announced it would slash production by 64,000 vehicles in February and March. Nissan has cut production by about 225,000 vehicles since September, having initially expected to produce 1.38m vehicles this year. To add to the misery, reports this week said the firm would post its first operating loss since it was rescued from near-bankruptcy by chief executive Carlos Ghosn, who arrived from Renault in 1999. Nissan will halt production for a total of 33.5 days at three domestic plants next month, the company said, adding that it has not finalised closures. Nissan will lay off its entire temporary staff in Japan by March, as well as dramatically reducing workforces in the US, Spain and Britain, including 1,200 redundancies at its UK plant in Sunderland. Japan's exporters have seen earnings decimated by the yen's recent gains on the dollar. The US currency, worth about ?110 a year ago, now hovers around the ?90 level. Automakers' inventories have ballooned amid plummeting demand in the key US market, while sales of new cars in Japan fell to their lowest level in 34 years last year.