As Toyota further extends its Japan shutdown, a picture emerges on which models will run out first

To hardly anyone’s surprise, Toyota has announced yet another extension of its vehicle-production halt at all plants in Japan (including subsidiary vehicle manufacturers) until at least Saturday 26 March (a previously-scheduled Saturday production day), as reported on Toyota’s USA and Global Newsrooms. This newly extended shutdown brings the estimated loss of production units to about 140,000 since the earthquakes and tsunami struck. About 60% of those vehicles, or 84,000, would have been export bound. This was followed by cautionary warnings of likely production interruptions in North America of indeterminate location or duration. A Reuters article, citing Toyota spokesman Craig Mullenbach, suggests that the company’s San Antonio, Texas plant that builds slow-selling Tacoma and Tundra pickup trucks is the likeliest North American production facility to be idled.

In better news, the previously-announced resumption of replacement parts production on Thursday 17 March and of parts for overseas production facilities on Monday 21 March was reaffirmed, along with word that all 13 North American vehicle and engine plants are, for now, running normally, although overtime has been curtailed to conserve parts that come from suppliers in Japan.

Meanwhile, a story from the British-based (and limited access) just-auto.com site brings us an update from Toyota Kirloskar Motor (TKM), Toyota’s importer, assembler and distributor in India. Sandeep Singh, TKM’s deputy managing director informs us that most parts are sourced from from Thailand and Indonesia and there would be no immediate threat to the Indian operations as stocks for the current month are sufficient and components ordered earlier are also on the way. Still, he cautiously adds that “We are still assessing the situation and would likely be in a better position to comment on that in the next few days”.

Also reporting updates is the Guangzhou Toyota operation in south China via a Reuters story. The company states that, given 90%-95% Chinese content of locally-built Toyota Camrys plus current stocks of Japanese-sourced parts, they should be fine until mid-April. The article also estimates that current inventory of Lexus vehicles in China is sufficient to sustain sales for two months.

A recent iteration of the Toyota USA Newsroom’s earthquake and tsunami statement ends by saying that “Regarding dealerships in the U.S., inventories remain generally good”. While that may certainly be the case at present, most pundits think that by the time April ends, the situation may be very different, especially insofar as Toyota and Lexus models sourced from Japan. The uncertainty and pessimism hinges around two basic facts. For one, while the majority of Toyota factories and their larger (Tier 1) suppliers are based around the Tokyo and Toyota City areas that are hundreds of miles from the major earthquake and tsunami epicenter, that is not necessarily the case with smaller, almost mom-and-pop Tier 2 and Tier 3 suppliers and machine shops. Depending on the vehicle and who you listen to, a modern car has somewhere between 5,000 and 30,000 individual parts, and if even one of them is missing, you certainly can’t produce the vehicle. Honda and Nissan have reported difficulties or an outright inability to contact over 40 of these small suppliers, and it’s most likely that Toyota is in this same situation. The second issue, as Michael Smitka, professor of economics at Washington and Lee University in Lexington, Virginia said in a Bloomberg article, “You can’t get trucks in and out of the area affected by the disaster. In some cases, a road or bridge may be open, but with only one lane available. Are you going to try to put through a shipment of machinery at the expense of getting through a shipment of food?” Oh, and don’t forget to add the disruption added by rolling power blackouts due to the ongoing Fukushima Daiichi nuclear plant drama.

Although predicting the future supply situation of any given vehicle is an imprecise guessing game, two articles provide valuable data that sheds a faint light on the subject, not just for Toyota but for Japan’s major automakers. The first of these was written by Bill Visnic of Edmunds AutoObserver, and was already cited as a source for our recent Subaru update. The second is a study by Hans Greimel of Automotive News of the 20 top-selling Japan-built models sold in the United States and their recent sales numbers. Combining data from these two sources, plus a sprinkling of information from other articles allows us to compile this cautious and admittedly hazy snapshot of what to expect supply-and-demand-wise from a number of imported-from-Japan Toyota and Lexus models in the coming months:

Toyota Prius
With 140,928 units sold in 2010, plus a further 24,174 units in January and February 2011, the Prius is currently Toyota’s best-selling Japanese import vehicle in the United States. Given its rise in popularity concurrent with the rise in gasoline prices, it is often cited alongside the Nissan Leaf and Honda Fit as one of the three vehicles most threatened by low supply and high demand, a situation further exacerbated by one of three Toyota/Panasonic Primearth EV battery-making facilities being among the most affected by the Japanese natural disasters.

A report from Edmunds AutoObserver from Monday 21 March affirms that consideration of the Prius among online shoppers is up more than 30% since the beginning of the year, triple the 11% increase in consideration of all hybrids and of all small cars in general, with one Pennsylvania dealer reporting a quadrupling of interest. Yet, at this point, supply still seems reasonable (with California’s Longo Toyota reporting about a 30-day supply) and there are few if any reports of over-MSRP selling. Some dealers are selling Prii at MSRP, while Tony Gmitrovic of Elmhurst Toyota in the suburban Chicago, Illinois area reports that “while Prius hybrids are still going out the door at below MSRP, instead of at $700 to $800 below we’re seeing them go at $400 to $500 under.” Two days later, the Detroit Free Press quoted TrueCar.com‘s Jesse Toprak as stating that, “American consumers are paying at least $2,000 more for a Toyota Prius than they would have paid before the crisis began… Prius went from selling about $300 under invoice three weeks ago to selling right at the MSRP since the earthquake.”

This may be a short-lived situation, however, as the Toyota USA Newsroom has just announced that on Monday 28 March Toyota will restart production of the Prius at the Tsutsumi plant in Toyota City.

The Prius’ larger Prius v/Prius+ sibling’s launch in Japan, originally slated for late April, has become the first new model debut postponement as a result of the Japanese earthquakes, a fact announced via a Toyota USA Newsroom press release. Seemingly unaffected, at this point, are the late summer 2011 U.S. release of Prius v and the “first half of 2012″ on-sale date for Prius+ in Europe.

Toyota RAV4
Given that the RAV4 has been made in Canada since 4 November 2008, it may seem odd to see it listed here. A glance at Toyota’s February 2011 sales chart, however, reveals that just over 23% of RAV4s sold in the U.S. thus far in 2011 are imported from Japan. It remains to be seen if the Canadian plant has the capacity to take up the slack from Japan, or if, to the contrary, a lack of parts will also bring Canada to a halt. We should also note that the current RAV4 is due for a next-generation makeover no later than the 2013 model year.

Lexus ES
Perennially Lexus’ best-selling car (as opposed to crossover SUV), the ES is cited by Edmunds AutoObserver as being among the company’s models most at risk of low supplies by the industry’s Days to Turn metric. Defined as the average number of days vehicles were in dealer inventory before being sold during the month(s) indicated, the ES’s 26-day supply for February 2011 and a probably lower-than-average additional supply for March may translate into serious shortages as soon as mid-April.

The fact that the current Lexus ES isn’t even offered in either the Japanese Domestic Market nor in Europe, with the bulk of its production destined for North America, as well as its strong under-the-skin kinship with the made-in-America Toyota Camry, and it is little surprise that every time a fiscal or political U.S./Japan crisis flares up, rumors start to run amok regarding North American Lexus ES production. The great Japanese earthquake and tsunami of 2011 may well be the tipping point that finally makes this happen.

Toyota 4Runner
With all the talk of the traditional body-on-frame, truck-based SUV such as the 4Runner being an endangered species, it comes as something of a surprise to see it appear so prominently on these lists. Yet, with a notable sales upturn for the 5th-generation model that debuted for the 2010 model year, the 4Runner is #10 among the top 20 best-selling Japanese-built vehicles in the U.S., and its 35-day supply on February 2011 implies that getting one after late April could be a dicey proposition.

Toyota Yaris
Predictions surrounding the Toyota Yaris are probably the most complex and convoluted you’ll find in this article. Edmunds AutoObserver informs us that the current Yaris Days To Turn figure in the U.S. is well over 100 days, thus hinting that current inventory won’t sell out until as late as July. Things are not that simple, however, as another spike in gasoline prices as a side-effect of the current war in Libya (or further spread of Middle East unrest) coupled with dwindling Prius stocks could well drive renewed demand for one of the U.S. market’s most fuel-economical non-hybrid vehicles.

Also, the current, 2nd-generation Yaris is winding down its last model year, and its 3rd-generation successor went on sale in Japan in late December 2010, as well as appearing as a Yaris HSD Hybrid concept for Europe at this month’s Geneva Auto Show. With the Prius v/Prius+ Japanese launch already delayed, the same fate may well behold the 3rd-generation Yaris launch outside Japan. Even worse for the U.S. market, the bulk of current Yaris sedan production (also sold as Toyota Belta or Vios in other markets), as well as 3rd-generation Yaris for North America and the Middle East is or would be served from the Central Motor Company facility in Miyagi prefecture, near Sendai, ground zero for the tsunami of Wednesday 9 March. While the plant is located back near the mountains, away from the shoreline where the tsunami made landfall, and reported damage to its wall and some pipes but no major structural or equipment problems, the state of its nearby infrastructure imply that this may well be Toyota’s last Japanese plant to reach any semblance of normal production. Toyota is surely brainstorming alternatives, and radical possibilities include sourcing Yaris production for North America from Europe’s Valenciennes, France plant or even this author’s suggestion that Yaris be built in Mexico.

Toyota Corolla
Another unexpected entry in the list is the Toyota Corolla. Its situation is much like that of the RAV4 mentioned earlier, with Canadian output supplemented by Japan-built vehicles that comprised just over 24% of U.S. Corolla sales. Again, it remains to be seen to what extent the Canadian plant has the capacity to take up the slack from Japan, or if a lack of parts will eventually bring Canada to a halt. Probably mitigating the Corolla situation, however, is on-again construction of Toyota’s Blue Springs, Mississippi factory, tentatively slated to begin production of the Corolla this coming fall.

Lexus IS
The overall 15th best-selling Japanese-built vehicle in the U.S. for 2010, Lexus’ smallest rear-wheel-drive sports sedan line currently has a 31-day Days To Turn figure in the U.S. for the IS 250, a bit over the ES’s 26-day figure. Thus, Lexus ISs could start becoming scarce by the end of April.

Lexus RX
You may be forgiven for wondering why Hans Griemel’s Automotive News article ranks the Lexus RX below its ES and IS stablemates as the 19th-best-selling Japanese vehicle imported into the United States for 2010 (and outside the top 20 for 2011) when it is, in fact, the marque’s best-selling vehicle here. The answer, again, is the same as for the Toyota RAV4 and Corolla: a mix of Canadian and Japanese sourcing. The latter comprises 30% of all Lexus RXs sold in the U.S., including all hybrid RX 450h models.

Does Lexus have the capability of sourcing RX Hybrids from North America as well? Tentatively, yes, but the logistics may not be all that easy, given that only the Cambridge, Ontario plant is geared to Lexus levels of fit-and-finish and quality, while only Kentucky has hybrid powertrain assembly expertise with the Camry.

Lexus LX
Although a niche, low-volume model, Lexus’ top-of-the-line SUV currently has but a 26-day supply on hand at dealers as of February 2011, just like its ES sibling. This implies that stocks could begin running seriously low as soon as mid-April. It would be interesting to see how that figure compares to the very similar Toyota Land Cruiser.

Lexus LS
The luxury carmaker’s flagship sedan, the Lexus LS, though far from being the marque’s volume leader, currently reports a 34 Days to Turn inventory, which probably means meager selection at U.S. Lexus dealers by the time the end of April rolls around.

Lexus CT
The Japanese natural disasters couldn’t have come at a worse time vis-à-vis the launch of Lexus’ newest volume model line, the premium compact hybrid CT. With the bulk of Lexus’ advertising and marketing initiatives for 2011 (some of them quite unorthodox and youth-oriented) directed towards the CT 200h, many feared that it would all become a monumentally wasted effort. Indeed, anecdotal evidence coming out of California already conveys tight CT supplies for the demand that’s out there. Fortunately, The Lexus CT is one of a trio of vehicles (along with the Toyota Prius and another Lexus that we’ll discuss shortly) that will see a resumption of production in Japan on Monday 28 March. Thus, Lexus’ Kyushu plant joins the Toyota Tsutsumi plant in Toyota City as the only two of the automaker’s facilities producing vehicles in the motherland.

Frankly, it makes all the sense in the world for Lexus to put its current diminished resources behind CT. After all, this is the vehicle that is expected to exponentially increase the marque’s sales in Europe, and interest in North America has also been heightened by the recent runup in gasoline prices.

Lexus HS
Toyota’s decision to prioritize Japanese production of Prius and Lexus CT, as noted earlier, is a sound one that may well be described as a no-brainer. Much more puzzling, however, is awarding this vaunted status to Lexus’ HS 250h. After all, this is a model that isn’t offered in Europe, was ultimately turned down by Australia and has sold well below expectations in North America. Granted, it’s Lexus’ best-selling model in the Japanese Domestic Market, but who in Japan would currently have their mind on car-shopping? Yet, the fact that it is built alongside the Lexus CT in Kyushu, its degree of platform and component commonality with Prius and CT, plus a possible decent supply of parts probably made a case for its inclusion in the upcoming reopening of Japanese production. Hopefully, parts inventories and logistics permitting, the Kyushu plant is flexible enough to adjust CT vs HS production. Or, perhaps, HS will finally begin to gain some sales traction in the U.S. It may already be doing so in California, at any rate.

Photo Credits:
Photo 1: Bertel Schmitt – The Truth About Cars
Other Photos: Toyota USA Newsroom