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Toyota bears China Output Loss on Account of Tianjin Blasts

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Published on : Aug 17, 2015

Toyota Motor Corporation has to bear losses at its biggest car production center in China for at least three days, with automakers speculating the damage caused by explosions last week in the port city of Tianjin. 

The evacuation of the area is preventing Toyota Motor Co.’s Tianjin FAW unit to operate through Wednesday. There is speculation among the company executives if operations will start after the lift of contamination advisories and are still confirming the range of the damage with blown-out windows in the facility, as started by a company spokesperson.

The large toll on suppliers and automakers that depend on the port for storing vehicles and spare part of ships is unclear.

Volkswagen AG and Toyota have not been able to gauge the number of cars that have been damaged. Hyundai Motor Co. is continuing to tally the number of vehicles lost and has also drawn shutters at a nearby logistics center. 

In the interim, Mazda Motor Corp. commented that though the company has sufficient inventory for the present situation, there is concern regarding potential disruptions of flow of components. 

The blast at a chemical storage plant in Tianjin has led to 114 casualties with 70 people missing. On Sunday, the site was visited by Premier Li Keqiang, and vowed that he would find the cause of the explosions.

The Japanese carmakers also said that they ignored production losses incurred last week due to operations being closed on account of a holiday. Amongst all, Toyota is the one to bear maximum losses unable to get back to production soon.

Last year Tianjin FAW Toyota manufactured around 440,000 Reiz, Corolla, Crown, and Vios cars, which accounted for almost half of the company’s production in China. At about 44 km from the blast sit, a manufacturing unit at Xiqing is dependent on parts manufactured in Tianjin.