Toyota production: still tracking above 2008

by SR on June 29, 2012

Toyota global production by year and month (thousand units)

Toyota announced its domestic and global production figures for May 2012 yesterday (29 June). In this recent post on Toyota’s rolling production forecast I suggested that domestic production in May would decline by somewhere between 0% and 5% month-on-month. The reality was at the positive end of that range, with a 0.3% fall in production relative to April 2012. That’s a tiny bit better than the long-term median change for May, so nothing to write home about.

Global production for May 2012 came in at 761.7k units, up 164.7% year-on-year (a meaningless figure given the disruption caused by the Northern Japan earthquake this time last year) and up 9.5% month-on-month. Seasonally speaking that’s a pretty good figure for May and reflects Toyota’s product momentum. The chart above (click for a larger image) shows that for 4 out of 5 months in 2012 (the red line), global production has been above the same months of 2008 (the green line).

Given that early 2008 was in absolute terms a cracking period for Toyota, this is excellent performance. It was always clear that Toyota would surpass 2011 levels, but the company is well ahead of much stronger years as well, as shown by the graphic below. For the whole period of January to May 2012, output remains ahead of production during the same period of 2008 by 3.4%. Not much, but a good showing.

Toyota global production, cumulative (million units)

So why was May 2012 so much better than the seasonal average? The temptation is to assume that Japan was strong due to eco-car subsidies in that country but in fact, as noted above, May production in Japan was not especially strong. The winner was the rest of the world – Asia and China being the two main components here, with Europe also contributing (although one suspects that region was not contributing much). The seasonal norm for RoW in May is a solid 10% increase relative to April, but in May 2012 that increase was 20.2% MoM, so it was unusually robust. This surge in output in RoW drove Toyota’s production worldwide to the month-on-month increase of 9.5% noted above and is clearly visible in the chart below (click for a larger image). The median change is a little over zero for May, but was nearly 10% in May 2012.

Toyota global production, month-on-month change in May output 2000-2012 (%)

Finally, it’s worth keeping in mind that Toyota’s production in the rest of the world is bumping up against capacity constraints and the company will need to add more capacity if it is to continue to grow in these emerging markets. The chart below shows monthly output as a percentage of the previous highest level recorded. In May 2012 that figure was 96.4%. The regular steps in the red line in the graphic below show where Toyota has raised effective capacity in the past, so the company is clearly well aware of the situation and has made four such capacity hikes since 2009.

Toyota production in rest of world (ex Japan, North America) vs previous peak

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