Toyota is still the largest auto producer in Japan. Workers (above) put the finishing touches on Lexus LS300ís coming down the line at the Tahara assembly plant. Though slow to respond to a deca" />

Issue: Apr 2003


Asia Report



Japanese Production Capacity Now the Right Size

by J-Reports






 
Toyota is still the largest auto producer in Japan. Workers (above) put the finishing touches on Lexus LS300ís coming down the line at the Tahara assembly plant.
Though slow to respond to a decade of market structural changes, Japanese automakers finally moved to scale back production capacity three years ago.

Since spring 2000, eight plants and two final assembly lines have been closed. One, perhaps two more are being targeted by early 2005. Combined capacity cuts to date: 1.8 million units, representing a nearly 15 percent reduction of installed capacity from levels of three years ago to 11 million units and lowering excess capacity from 30 percent to around 10 percent. Production last year rose 5 percent to 10.3 million units, although the five-year average from 1998 is 10 million.

Included among the closures: Aichi Machine Industry Co.ís Nagoya plant (100,000 units), Kanto Auto Works Ltd.ís Yokusuka plant (180,000 units), Mitsubishi Motorsí Oye (228,000 units), Nissan Motorís Murayama and No. 1 Kyushu plants (450,000 and 360,000 units), Nissan Shatai Co.ís Kyoto plant (120,000 units), Press Kogyo Co.ís Fujisawa plant (72,000 units) and Takada Kogyo Co.ís Yokohama plant (30,000 units). Meanwhile, Honda Motor shut down its No. 2 assembly line at Suzuka (200,000 units), while only marginally boosting capacity with the overhaul of the now 34-year old Suzuka No. 1 line, and Mitsubishi consolidated four Mizushima assembly lines into three (90,000 units). Scheduled for closure early next year is Isuzu Motorsí Kawasaki truck plant with capacity of 25,000 units.

Mazda Motor, which temporarily closed its Hiroshima-Ujina No. 2 line (220,000-unit capacity), is scheduled to reopen the facility in 2004. Against this backdrop, Suzuki Motor added a third final assembly line in Kosai, boosting installed capacity at its main assembly plant to an estimated 570,000 units, a net gain of 120,000. Making extensive use of overtime, management projects output of 670,000 units this year.

Analysts feel that current capacity is almost the right size for the industry, given the steady offshore shift of production since the mid-1980s and consequent drop in exports. And while the past six years have seen a slightly recovery in export volumes (averaging 4.4 million per year), analysts feel that by the end of the decade exports will settle below 4 million units, meaning production is likely to fall to 9.5 million or slightly lower.



2002 OUTPUT BY MANUFACTURER (in units)





































Toyota 3,485,000 (+3.9%)
Nissan 1,392,000 (+9.6%)
Honda 1,387,000 (+8.0%)
Suzuki 1,000,000 (+10.2%)
Mitsubishi 871,000 (+4.4%)
Mazda 773,000 (+6.1%)
Daihatsu 600,000 (-6.2%)
Fuji 436,000 (-5.7%)
Isuzu 231,000 (+6.8%)
Hino 54,000 (+1.4%)
Nissan Diesel 27,000 (+10.8%)
Total 10,258,000 (+4.9%)
Source: Goldman-Sachs Japan




2002 OUTPUT BY PLANTS (in units)
















































































































































































Output Capacity*
Toyota City (Araco Corp.) 131,400 150,000
Sagamihara (Central Motor) 90,000 80,000
Maebashi (Daihatsu Auto Body) 133,000 144,000
Ikeda (Daihatsu Motor) 240,000 360,000
Kyoto (Daihatsu) 132,000 192,000
Shiga (Daihatsu) 204,000 204,000
Ohta (Fuji Heavy) 150,700 297,000
Yajima (Fuji) 285,300 316,000
Hamura (Hino Motors) 165,000 155,000
Hino (Hino) 42,900 80,000
Sayama (Honda) 550,900 550,000
Suzuka (Honda) 572,800 500,000
Utsunomiya/Tochigi (Honda) 17,100 30,000
Fujisawa (Isuzu) 226,800 375,000
Kawasaki (Isuzu) 4,800 25,200
Higashi-Fuji (Kanto Auto) 150,000 220,000
Iwate (Kanto Auto) 150,000 120,000
Hofu No. 1 (Mazda) 193,400 240,000
Hofu No. 2 (Mazda) 203,300 160,000
Hiroshima-Ujina No. 1 (Mazda) 314,600 N.A.
Hiroshima-Hdq (Mazda) 62,400 200,000
Kawasaki (Mitsubishi Fuso) 88,000 176,000
Okazaki (Mitsubishi) 233,600 213,000
Mizushima (Mitsubishi) 356,100 677,000
Kaminakawa/Tochigi (Nissan) N.A.** 270,000
Kyushu (Nissan) N.A.** 240,000
Oppama (Nissan) N.A.** 550,000
Ageo (Nissan Diesel) 27,000 126,000
Hiratsuka (Nissan Shatai) 304,600 280,000
Sakahogi (Pajero Motor) 160,000 140,000
Iwata (Suzuki) 302,000 325,400
Kosai (Suzuki) 645,000 570,000
Fujimatsu (Toyota Auto Body) 305,000 490,000
Inabe (Toyota Auto Body) 132,000 115,000
Kariya (Toyota Auto Body) 35,000 220,000
Nagakusa (Toyoda Industries) 230,000 280,000
Honsha (Toyota) 161,000 100,000
Miyata/Kyushu (Toyota) 270,000 240,000
Motomachi (Toyota) 120,000 120,000
Tahara (Toyota) 461,000 500,000
Takaoka (Toyota) 634,000 680,000
Tsutsumi (Toyota) 397,000 450,000
Yokkaichi (Yachiyo Industries) 245,600 200,000

* Araco Corp., Central Motors Co., Ltd., Kanto Auto Works, Toyota Auto Body Co., Ltd. and Toyoda Industries (formerly Toyoda Automatic Loom Works, Ltd.) produce cars for Toyota; Nissan Shatai Co., Ltd. manufactures Nissan models; Pajero Motor Manufacturing Co makes sport/utility vehicles for Mitsubishi Motors; and Daihatsu Auto Body Co., Ltd. and Yachiyo Industry Co., Ltd. produce vehicles for Honda and Daihatsu. Not included in the survey are special-purpose makers such as Gifu Auto Body Co., Ltd. and Hino Auto Body Co., Ltd. Their combined capacity is under 10,000 units. ** Nissan production (excluding Nissan Shatai) totaled 1,087,400 units in 2000, accord ing to Goldman-Sachs Japan. Source: companies, Fourin Inc.




25-YEAR PRODUCTION & EXPORT HISTORY










































































































Output Exports
1978 9,269,000 4,601,000
1979 9,636,000 4,563,000
1980 11,043,000 5,967,000
1981 11,180,000 6,048,000
1982 10,732,000 5,591,000
1983 11,112,000 5,670,000
1984 11,465,000 6,109,000
1985 12,271,000 6,730,000
1986 12,260,000 6,605,000
1987 12,249,000 6,305,000
1988 12,700,000 6,104,000
1989 13,026,000 5,884,000
1990 13,487,000 5,831,000
1991 13,245,000 5,753,000
1992 12,499,000 5,668,000
1993 11,228,000 5,018,000
1994 10,554,000 4,460,000
1995 10,196,000 3,791,000
1996 10,346,000 3,711,000
1997 10,975,000 4,553,000
1998 10,049,000 4,529,000
1999 9,895,000 4,409,000
2000 10,141,000 4,454,000
2001 9,777,000 4,166,000
2002 10,259,000 4,699,000

Source: Japan Automobile Manufacturersí Association

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