Toyota (NYSE:TM) reported a decline in production of 46.5% in Japan last month, compared to May 2010, and a sales volume decline of 47.4% in Japan, while overseas production was down 43.3% and worldwide production dropped 44.7%. Now the automaker has been downgraded, with Moody’s lowering its Toyota’s debt from Aa2 to Aa3.
But Toyota plans to be back running at full-capacity by November or December, nearing pre-earthquake levels as soon as July. They also plan to produce an additional 350,000 vehicles between October 2011 and March 2012 to make up for lost production after the earthquake.
Toyota has been losing some of its market share to U.S.-based competitors like Ford (NYSE:F) and Chrysler, with General Motors (NYSE:GM) poised to take Toyota’s place as the world’s number one automaker.
In order to acquire cash with which to pay workers and suppliers in order to restart stalled production, automaker Saab will be entering into a partial sale and lease-back agreement with a consortium of Swedish real estate investors, led by Hemfosa Fastigheter AB, who will purchase 50.1% of the shares in Saab property for 28 million euros. The lease agreement will last for 15 years.
Saab’s deal needs permission from the European Investment Bank, the Swedish National Debt Office, and the Swedish government. Last year, when Swedish Automobile, formerly Spyker Cars NV, bought Saab from GM, it secured a 400 million euro loan from the EIB. But if the Swedish debt office approves the sale, the value of the EIB loan guarantee will drop to 280 million euro, of which 216.9 euro has already been drawn.
Saab sales have fallen short of expectations, and production has been halted for the past three months as the automaker has found itself unable to pay parts suppliers, and now can’t even afford to cover employees’ wages. Saab has asked suppliers to accept 10% of their overdue bills to resume delivery so the company can resume production.
Nissan Motor Co. (TYO:7201), in partnership with Renault SA (EPA:RNO) and other automaker affected by earthquake-related supply disruptions, will actively promote the use of common auto parts. The standardization of parts would cause prices to fall, saving automakers money, while not hurting the profitability of suppliers, who would then be able to mass-produce components.
Improve Your 2011 Financial Health: Join the winning team of stock pickers with Wall St. Cheat Sheet’s acclaimed premium newsletter >>