Cars and Drivers

Toyota Likely to Fall Short of Its 10 Million Vehicle Goal

After struggling through the financial crisis, massive recalls that harmed its reputation, and an earthquake and severe floods that crippled production, Toyota Motor Corp. (NYSE: TM) seemed to be back on track with its goal to produce 10 million vehicles this year. That would have been a first for the auto industry worldwide.

But it looks that 10 million vehicle goal may be out of reach, at least for this year. The Japanese auto maker faces two main obstacles: plunging sales in China and a suspended production in South Africa.

The territorial dispute between China and Japan over a set of remote islands has prompted an anti-Japan backlash in China. Toyota’s sales  dropped by nearly half in September, compared with the same month of last year. The ill will could result in a production loss of up to 126,000 vehicles in the fourth quarter, some analysts predict.

A Toyota plant in Durban, South Africa, was idled four days by a strike by workers earlier this month. Production was suspended again this week due to a strike at a supplier of seats and door parts. The company has production capacity to make 220,000 vehicles a year in South Africa.

Toyota releases production numbers for September next Friday, and they like will show it is losing momentum, perhaps pushing that 10 million vehicle goal just out of reach for now.

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