Toyota may slip to No. 3 in the global production rankings behind General Motors and Volkswagen due to Japan's earthquake and nuclear crisis, which slashed local output by almost two-thirds in March alone.
A shortage of parts in the wake of the March 11 earthquake and tsunami has savaged Japan's vehicle sector supply chain, while damage to a major nuclear plant has disrupted power supplies.
Investors expecting overseas rivals to benefit from a prolonged slump in Japanese output pushed up shares in South Korea's Hyundai Motors and associate Kia Motors to record highs on Monday.
In Japan and North America, Hyundai, GM and Ford stand to be the biggest winners, analysts said, because of Hyundai's established small-car lineup and GM and Ford's growing and improved small-car lineups.
Honda is expecting it to take until the end of the year before production returns to normal, echoing recent comments from Toyota.
Honda, which reported domestic production shrank 63 percent in March, said output would be at 50 percent of its original plans until the end of June.
Domestic production at Toyota plummeted 63 percent in March, while Japan's No. 2 Nissan said its corresponding figure fell 52 percent.
On Monday, Ford said it would idle plants in Taiwan, China, and South Africa this week, pushing up closings it had scheduled for later in the year. Two weeks ago, the company signaled it would likely shut plants in Asia starting in late April and going into May.
Ford did not say whether the lost production would be made up later, or if it would adjust its global output forecast for 2011.
Toyota is almost certain to lose its top spot in global vehicle production, a title it attained in 2008 by overtaking General Motors. GM looks like it will slide into the top spot and Toyota could fall behind Volkswagen, which is currently No. 3, said Koji Endo, managing director of Advanced Research Japan in Tokyo.
Toyota, which sold 8.42 million vehicles last year versus GM's 8.39 million, was on track to post sales of around 6.5 million units this year, Endo said. Other analysts, lacking clear guidance from Toyota, expect sales of roughly 6.3 million to 7 million units.
“Most likely GM will produce 8 million-plus and Volkswagen will produce around 7 million, so most likely Toyota will be third, GM will be first,” Endo said.
Volkswagen has a stated goal of taking Toyota's No. 1 spot and expects its 2011 sales to top the record 7.14 million vehicles it sold last year.
Toyota played down the prospect of losing its top ranking.
“When Toyota became No. 1 there were no champagne corks going off here,” said Toyota spokesman Paul Nolasco. The March sales were the worst since records began in 1988, he added.
Standard & Poor's later cut its outlook on six major Japanese automakers and suppliers to “negative” from “stable.”
Johnson Controls Inc, one of the world's largest auto suppliers, on Monday projected a drop in third-quarter revenue of $500 million due to the falloff on Japanese vehicle production.
Production has also been disrupted outside Japan, as factories in Europe, North America and the rest of Asia scale back due to parts shortages.
However, the impact on production is minor relative to the halving of Japan's automotive production during the calendar second quarter seen by some analysts, including Brian Johnson of Barclays Capital.
Johnson said he expects Japanese vehicle output to drop by 50 percent in the second quarter, to be near normal in the third quarter, and produce more than normal in the fourth quarter. -Reuters