(Bloomberg) -- Toyota Motor Corp. may see its operating profit reduced by about 30 billion yen ($277 million) for the current quarter after a series of earthquakes struck southern Japan and disrupted parts supplies to the world’s largest automaker.
Production shifts stopped late last week at Toyota’s Kyushu factories and will extend to other Japan assembly lines in stages throughout this week, Toyota said in a statement. Japan’s most devastating earthquakes since March 2011 began striking the southern island of Kyushu on Thursday and have halted some engine and parts production for Aisin Seiki Co., chip manufacturing for Renesas Electronics Corp. and Mitsubishi Electric Corp. and motorcycle output for Honda Motor Co.
Toyota’s loss of production may reach 56,000 vehicles for Toyota and Lexus and 7,500 units for minicar maker Daihatsu Motor Co., Koichi Sugimoto, a Tokyo-based analyst at Mitsubishi UFJ Morgan Stanley wrote in a report Monday. The 30 billion-yen estimated impact to operating profit may linger into the second quarter through September, he said.
|Continuity plans
The earthquakes will test the business continuity plans that Toyota and its Japanese peers drafted after natural disasters hit the nation’s east coast five years ago and disrupted operations for months. The stakes are high for Toyota because it relies on domestic manufacturing more than its peers. The company and its affiliates made more than 4 million vehicles in Japan last year, 40% of their worldwide output. Nissan Motor Co. and Honda Motor Co.’s shares of auto production from Japan were 17% and 16%.
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