Toyota set to lose top spot after quake

City A.M. Reporter
TOYOTA looks set to slip to number three in the global carmaker production rankings, behind General Motors and Volkswagen, after the Japanese earthquake and nuclear crisis slashed output by almost two-thirds in March.

A shortage of parts in the wake of the 11 March earthquake and tsunami has savaged Japan’s car supply chain, while damage to a major nuclear plant has disrupted power supplies.

Investors expecting overseas rivals to benefit from a prolonged slump in Japanese output pushed up shares in South Korea’s Hyundai Motors and associate Kia Motors to record highs yesterday.

“Hyundai and Kia will be the biggest beneficiaries of the struggling Japanese car industry,” said Suh Sung-moon, an analyst at Korea Investment & Securities in Seoul.

Domestic production at Toyota, the world’s largest carmaker, fell 62.7 per cent in March, while Nissan said its corresponding figure fell 52.4 per cent.

Toyota is almost certain to lose the top producer ranking it has held since 2008 to General Motors this year and could fall behind number three Volkswagen.

Toyota, which sold 8.42m vehicles last year versus GM’s 8.39m, is on track to post sales of around 6.5m units this year.

Meanwhile, Standard & Poor’s has cut its outlook on the six major Japanese carmakers and suppliers to negative from stable.

“In our opinion, extended production cuts may erode Japanese automakers’ market shares and competitive positions in the longer term,” S&P said.