Japanese automaker Toyota Motor Corp. (TM: Quote) plans to scale back production of Lexus vehicles intended for export to China amid anti-Japan demonstrations in that country, the Nikkei business daily reported Monday.
For an indefinite period, Toyota will reduce production at a factory in Fukuoka Prefecture in Japan by about 20 percent from the current output of about 1,300 vehicles, the Nikkei reported. The factory builds mainly Lexus vehicles.
The Lexus models subject to the reduced output are said to include the ES, a sedan sold exclusively overseas, and the CT 200h, a compact hybrid vehicle.
In the meantime, Toyota reportedly intends to sell automobiles in China by drawing on its local inventories. The Nikkei reported citing a company official that Toyota sales were down about 30 percent compared with the period before the recent anti-Japan demonstrations in China.
The Fukuoka factory built 302,000 vehicles in the last fiscal year, with 22 percent of the output shipped abroad to Asia, mainly to China. The factory may now reportedly fail to meet its production target of 350,000 units for this fiscal year due to the output cut.
The latest news is in contrast to Toyota's rosy outlook for China earlier. In early September, media reports said that Toyota plans to introduce new cars exclusively for China in 2013 and also nearly double car sales in that country to 1.8 million vehicles by 2015. Toyota's sales in China were hurt by recalls in 2010 and strikes by group employees.
Anti-Japan demonstrations were witnessed in China recently over a disputed group of islands in the East China Sea that are claimed by both nations. The uninhabited islands, known as Senkaku in Japan, is under the administrative jurisdiction of Ishigaki city in the Okinawa prefecture.
The islands, also known as Diaoyu in China and Tiaoyutai in Taiwan, are claimed by all the three countries as the region surrounding them is oil-rich and close to key international shipping routes.
Tensions between Japan and China escalated in mid-September after the Japanese government announced that it purchased three of the disputed islands for 2.05 billion yen, or about $26 million, from Japanese businessman Kunioki Kurihara who claims to own them.
Other Japanese companies that were reportedly impacted by the anti-Japan demonstrations in China include electronics firm Canon Inc. (CAJ: Quote) and Panasonic Corp. (PC: Quote).
Canon reportedly halted operations at three of its four plants in the world's second largest economy early last week The company suspended production at a laser printer factory and a digital camera factory in Guangdong, as well as a copier plant in Jiangsu.
Panasonic reportedly suspended some of its operations in China, after two of its factories there were attacked by protesters. The electronics maker's factory in Qingdao will be closed until September 18.
TM closed Monday's trading at $80.50, down $1.00 or 1.23 percent on a volume of 341,092 shares.
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by RTT Staff Writer
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