Toyota in new drive after quake

TOKYO - Toyota Motor said it would resume work at its car assembly lines in Japan this week after an earthquake cut off supplies to its factories.

TOKYO - Toyota Motor said it would resume work at its car assembly lines in Japan this week after an earthquake cut off supplies to its factories.

The motor manufacturer said the natural disaster did not affect its sales targets for this year.

Car production at Japanese carmakers had virtually ground to a halt after the country's top supplier of piston rings, Riken, was hit by an earthquake on July 16.

Speaking at Toyota's yearly mid-year news conference on Monday the company's president, Katsuaki Watanabe, said the carmaker lost about 55000 units of vehicle output after a complete stoppage at all domestic plants following the natural disaster. The disaster affected 20 of Toyota's 31 assembly lines at its 12 group-wide car factories.

But Watanabe stressed that shutting down factory production was not alarming under the circumstances, and defended Toyota's famed lean-manufacturing method as one of its competitive strengths.

"We will gauge how to make up for the lost production in due time," Watanabe said.

"What's important is being able to figure out how swiftly we can fix the problem and return to normal."

Car sales in Japan have declined across the board, but Toyota's domestic factories have been working at full speed to satisfy demand overseas. Toyota exports 60percent of its Japan-made vehicles.

Watanabe agreed that the domestic market remained tough - Toyota's sales fell by 10percent in the first half of the year to 826000 units - but said he was counting on new car launches and this year's Tokyo Motor Show to jump-start sales.

"We realise that our domestic sales target of 1,72million units this year is very challenging, but we've seen some improvement in July and we are not changing our global targets," he said.

Toyota in December set a parent-only sales goal of 8,4million vehicles for this year and 9,34million units for the group, including Daihatsu Motor and Hino Motors. Both figures represent a 6percent rise from last year.

Toyota, which overtook General Motors as the world's biggest carmaker last year, has been boosting its sales volume and profits steadily driven by its popular, fuel-efficient models such as the Camry and Prius sedans.

Management has set a goal of 10percent operating profit margin, up from 9,3percent in the business year to March 31, and Watanabe said the carmaker would keep that target for the mid- to longer terms despite intensifying competition; the growing popularity of smaller, cheaper cars and the need to step up spending on developing environmental and safety technologies.

"I think it's a good target that works for the mid- to long term," he said.

Toyota already has the highest profit margin among the world's mass-volume car makers.

Domestic rivals Honda Motor and Nissan Motor had margins of 7,7percent and 7,4percent, respectively, last year.

As part of its safety activities, Toyota announced on Monday it would include side air bags and curtain shield air bags as standard equipment on all new passenger cars. - Reuters