Toyota suspends UK car production

Toyota will suspend car production at its two UK plants for several days this month and in May because of parts shortages following last month's massive earthquake and tsunami in Japan.

The world's number one car maker said today the move would affect five European plants - three assembly factories in Britain, France and Turkey, and two engine plants in Britain and Poland.

Toyota has two manufacturing centres in the UK, employing 3,200 people. The vehicle factory is in Burnaston, Derbyshire, and the engine plant is in Deeside, north Wales.

Production at the five plants will be halted for several days in late April and early May. Toyota had already announced a series of one-day shutdowns at its North American plants from April 15-25.

The magnitude-9.0 earthquake and ensuing tsunami on March 11 destroyed car parts factories in north-eastern Japan, causing severe shortages for Toyota and other makers. Toyota suffered a production loss of 260,000 cars in Japan from March 14 to April 8.

Toyota will resume car production at all its plants in Japan at half capacity from April 18-27, but the company has said it does not know when it can return to full production in the country due to the supply crunch.

Moody's Investors Service warned last week that it may downgrade its credit rating for Toyota amid concern over a prolonged production suspension.

Mamoru Kato, a car industry analyst with Tokai Tokyo Securities, said if the supply crunch dragged on, Toyota could incur "big losses" in the April-June quarter.

"The company simply cannot manufacture cars due to parts shortages. In North America and Europe, Toyota procures almost all engine parts from Japan. Suspended production in Japan and North America is a big blow to Toyota," he said.

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