Toyota Shock May Spur Supplier Failures Without Aid
Toyota Motor Corp.’s production cuts will cause bankruptcies among suppliers if Japan restricts aid to large manufacturers, a car parts group said.
Suppliers “are extremely worried that the loans will be limited to the top-tier companies,” Hisataka Nobumoto, chairman of the Japan Auto Parts Industries Association, said in an interview yesterday. “If the current sales environment continues, various outcomes, bankruptcies included, will result.” Nobumoto is also chief executive officer of Akebono Brake Industry Co., a Toyota affiliate.
February auto sales in the U.S., the world’s largest car market, slid to the lowest rate since December 1981, with Toyota’s sales sinking 40 percent and Honda Motor Co.’s tally dropping 38 percent. Toyota said earlier this week it may cut production by 12 percent next fiscal year to about 6.2 million vehicles, compared with the suppliers’ estimate of 7 million.
Continue reading [Article originally posted on Bloomberg]