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Toyota to resume some production, Honda suspended

March 24, 2011

Workers walk between Prius hybrids near Toyota's plant in Toyota, Japan. Japanese auto makers are struggling to restart production amid shortage of parts & workers. - Reuters Photo

OSAKA: Toyota will resume production of some hybrid models in Japan from Monday but rival Honda will extend a  suspension of auto assembly amid continued disruption caused by the March 11 earthquake.

Toyota on Thursday said it would resume production of its Prius and some Lexus hybrid models because it now expects to be able to procure parts and wants to prioritise output of models with higher demand.

But Honda said it would suspend auto production until April 3 at two domestic plants amid parts shortages due to disruption caused by the impact of the 9.0 magnitude earthquake and tsunami, and also a limited power supply.

The company, however, will resume production of motorcycle and power products at its Kumamoto plant from Monday.

The world's largest automaker had earlier delayed plans to restart car production, with supply-chains crippled by the biggest earthquake ever recorded in Japan and the raging ten metre tsunami it generated.

Around 26,000 people are confirmed dead or listed as missing in Japan following the disaster.

Economists are reviewing daily their increasingly bleak forecasts for an economy that has seen infrastructure along the northeast coast shattered, while power outages hit the Tokyo region. Firms have closed plants, hitting output.

Exports of key components and equipment used in the assembly of goods abroad, such as silicon wafers, liquid-crystal displays and electric machinery, have also been hit last week - sending shockwaves across global markets.

Japan on Wednesday said the cost of the March 11 earthquake and tsunami could hit 25 trillion yen ($309 billion), more than double the 1995 Kobe earthquake and nearly four times more than Hurricane Katrina.

The estimate does not account for wider issues such as how radiation from the stricken Fukushima nuclear plant crippled by the quake will affect food and water supply, amid a deepening food scare and unresolved atomic crisis.

Economists expect the economy to contract again in the January-March quarter, plunging Japan into a temporary recession following a decline in October-December. Growth in fiscal 2011 is expected to be near zero.