Toyota Cutting U.S. Production

Toyota Motor Corp. (TM) has put the brakes on output at its North American units in the face of the freefall in demand. The company has decided to stall production there for two extra days next month. And the signs are ominous as the company informed of its decision to further cut down on production in 2009 at three U.S. assembly plants. Toyota has already decided to halt production of light trucks earlier this summer. The stock is down 1.39% on the news.

The moves come at a time when the Detroit big three — General Motors Corporation (GM), Ford Motor Company (F) and Chrysler — are pleading for a bailout package from the government with the prospect of bankruptcy looming large. Zacks analyst Paul Raman has rated both GM and Ford shares as Sells with six-month target prices of $0.00.

Toyota has seen its market value being eroded by more than 40% in the last 12 months as sales have slowed in the biggest auto market of the world. The slump has meant the Zacks #5 Rank (”strong sell”) stock is on the verge of losing its AAA credit rating.

Analysts have more than halved Toyota’s earnings estimate for 2010 from $8.53 a share to $4.17, expecting another tight year. The view found support from Nissan Motor Co., Ltd. (NSANY) chief executive Carlos Ghosn on Wednesday. Ghosn told CNBC that according to realistic estimates, U.S. industry-wide sales may plunge from 16.15 million vehicles sold in 2007 to 11-11.5 million next year. The stock is down 3.80% since the morning.

Subscribe by RSS Subscribe by Email