Wednesday, January 29, 2014

What lesson can be learned here?

Reuters: Toyota to Cut Japanese Production by 15%

Reuters is reporting that Toyota Motor Corp is planning on reducing daily vehicle output at their Japanese plants by 15% in April, compared to last year. The company is adjusting to a reduction in demand for new cars following the implementation of an increase in the national sales tax rate. The tax hike, which raises the rate from 5% to 8%, is hoped to foster an increase in consumer spending before it takes effect at the beginning of April though it is simultaneously expected to create a temporary slump in consumer spending after the increase goes into effect.
Though the tax increase was originally suggested by the previous Japanese government, it has been given final approval by current prime minister Shinzo Abe and it is supported by International Monetary Fund officials and credit rating agencies as an appropriate means of reining in Japan’s considerable public debt.
A source told Reuters that Toyota plans to assemble approximately 12,200 vehicles a day in the month of April, which would be  down 15 percent from a year ago, though the  company does not disclose monthly plans. Full-year production in Japan will drop by 6% to 3.15 million cars and light trucks.
The company’s president Akio Toyoda said this month that he wants to limit the duration of the tax hike  to three months or less. ”And from July we can see an upturn in the mood,” he told reporters.

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