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Wed 1 Jun 2011 12:03 PM

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Toyota to ramp up exports to MidEast as supply eases

Japanese automaker says supply capacity rising after quake, tsunami hobbled plants

Toyota to ramp up exports to MidEast as supply eases
Japan’s March 11 quake and tsunami hobbled work at Toyota’s plants, disrupting supply to showrooms around the world

Toyota Motor Corp plans to increase its exports to the Middle East from June, as it ramps up production capacity at its earthquake-hit plans in Japan, the regional head of sales said.

The Japanese carmaker will export 42,000 Toyota and Lexus’ to the region in June, an increase of 2,000 units as production levels return to 90 percent of normal capacity.

“Originally in June we planned to export around 40,000 units to this region... probably we can export around 42,000,” said Hajime Sakaguchi, general manager for sales and  marketing, Middle East and Southwest Asia.

The world’s largest automaker was forced to halt operations for two weeks after the March 11 quake and tsunami hobbled work at its Japanese plants. In the weeks after the disaster, Toyota President Akio Toyoda had predicted his company would be unlikely to return to normal production levels until November or December.

Toyota had planned to export 520,000 vehicles to the Gulf in 2011 but will now miss that target, Sakaguchi said.

“We were planning to export around 520,000 units of Toyota and Lexus to GCC. However because of the shortage of production in April and May probably our volume level will be around 460,000 units plus alpha. Month by month, I want to add more vehicles to our shipment,” he told Arabian Business.

The slowdown has taken a toll on local dealers, who have struggled to match demand with supply as vehicle output slowed.

Al Futtaim Motors, the UAE franchise holder for Toyota, said in May expects to miss its 2011 sales target because of the disruption to supply. The company had expected to sell more than 100,000 cars in 2011.

The Middle East remains a rapid growth market for automakers, with Toyota predicting an 8-10 percent rise in sales in 2011 - despite the region’s widespread political unrest.

The economy is very strong thanks to the high level of crude oil price,” Sakaguchi said. “Government spending has been aggressive and will be aggressive, and the population in this region is growing very rapidly. All of these factors contribute to the expansion of the automobile market.”

Anti-government uprisings in the Gulf state of Bahrain and Egypt, the Arab world’s most populous state, hurt car sales but the company is expecting a rapid pace of recovery.

“There was unrest in Bahrain in April – for that month our sales were affected somewhat but it will recover. In Egypt… our sales activity has been very quiet but now, under the new leadership, we believe that they will get back to the normal level very soon,” Sakaguchi said.

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