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Honda Elements being assembled at a plant in East Liberty, Ohio. Palladium is used in vehicles' catalytic converters. (KIICHIRO SATO/Kichiro Sato/AP)
Honda Elements being assembled at a plant in East Liberty, Ohio. Palladium is used in vehicles' catalytic converters. (KIICHIRO SATO/Kichiro Sato/AP)

Honda, Toyota extend North American production cuts Add to ...

Honda Motor Co. Ltd. and Toyota Motor Corp. have warned of more pain to come in Canada and the U.S. as they announced production cuts at their North American assembly operations.

The parts shortage caused by the disaster in Japan means Toyota will shut all its Canadian and U.S. assembly plants for five days - with the exception of a Kentucky plant that will close for four days - between April 15 and April 25.

That move came after Honda announced, earlier Friday, that the cut in output of about 50 per cent at all its North American plants will be extended through the week of April 18.

"We anticipate that additional production adjustments will continue after that date," Honda added in a statement.

Toyota is reopening its Japanese plants and running them at 50 per cent of normal levels for two weeks beginning April 18, but will then close them for a spring holiday and assess the availability of parts before deciding whether and/or when to start them up again.

The earthquake, tsunami and nuclear crisis that hit Japan beginning March 11 have damaged scores of plants that produce parts for Japanese and other auto makers, particularly electrical components. It also damaged Honda's research and development centre and caused electricity shortages.

"The situation in Japan affects many auto makers and many other industries. Extraordinary efforts are under way to help suppliers recover," Steve St. Angelo, executive vice-president of Toyota Motor Engineering and Manufacturing North America said in a statement Friday. "We are slowing down to conserve parts yet maintain production as much as possible."

A senior American Honda Motor Co. executive told industry publication Automotive News earlier in the week that the production cuts could last for another 60 to 90 days.

A cut in output lasting that long would delay full availability of the 2012 Honda Civic, which is assembled in Alliston, Ont. and Greensburg, Ind., and is the key new vehicle launch for the auto maker this year. The Civic was the best-selling passenger car in Canada last year and its share of Honda's U.S. sales is growing as gas prices in the United States approach $4 (U.S.) a gallon.

"Delaying Civic would hurt Honda a lot, but is not catastrophic," industry analyst Dennis DesRosiers, president of DesRosiers Automotive Consultants Inc., said Friday.

Most consumers will wait for the exact vehicle they want rather than compromise, Mr. DesRosiers said. There are exceptions, however, such as drivers whose leases are ending or who have been in accidents and need new vehicles immediately, he said.

The Toyota vehicles made in Canada that will be affected by the company's shutdown are the Corolla and Matrix compact cars, the RAV4 crossover utility vehicle and the Lexus RX350 luxury crossover.

The parts shortage has affected auto makers globally, leading to production cuts in North America and Europe. Honda's plants in Japan have been shut since the earthquake hit. Chrysler Group LLC eliminated overtime at one of its two Canadian assembly plants this week because of a parts shortage; Ford Motor Co. shut a pickup truck plant in Kentucky; and General Motors Co. had shut a plant in Shreveport, La., but has since reopened it.

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