Parts shortages crimp Toyota's Prius output

TOYOTA CITY, Japan--Toyota Motor can't achieve full production capacity for its hot-selling Prius hybrid because of battery and inverter shortages at its parts makers.

The two Japan factories making the Prius are working overtime and holiday shifts to produce roughly 46,000 cars a month for global markets.

Toyota could dial up output, but the plants don't have the parts to support it, said Hidenori Nagai, general manager of Toyota's Tsutsumi plant, which makes 30,000 Prius sedans a month.

"Even though we have the capacity on the assembly line, for some parts we don't have enough numbers," Nagai said in an interview. He cited batteries and inverters as examples of several hybrid-specific components that are in short supply.

Component bottlenecks have limited output of the third-generation Prius since production began in April. Toyota's supplier of nickel-metal hydride batteries, Panasonic EV Energy, fell behind the initial surge in demand. But it is adding a third Japanese factory next year that will boost annual capacity to 1 million battery packs.

Toyota is targeting global Prius sales of 500,000 to 600,000 units in its first full year. But by the end of September, the company faced a backlog of 150,000 orders, Nagai said.

Filling those orders will require Tsutsumi to keep operating at its same rate until July, Nagai said. The plant's two lines are churning out a car every 57 seconds. The new Prius accounts for about 80 percent of Tsutsumi's output.

By contrast, a year ago, when Tsutsumi was making only the previous-generation Prius, the model accounted for just 25 percent of the factory's output, Nagai said.

Even if suppliers suddenly were to increase the flow of batteries, inverters, and other hybrid components, Nagai said there are other limitations to ramping up the Prius. For example, Toyota would have to find new manufacturing sites for the other models being built at Tsutsumi: the Scion tC small coupe and the Japan-market Premio and Allion sedans.

Also, any increase in battery supply would need to be shared among the Prius and Toyota's other hybrid models. Last month the company launched a new dedicated hybrid called the Sai. It is expected to soak up 36,000 battery packs a year.

"We need to think of the balance between batteries supplied to the Prius and also to other hybrid models," Nagai said, "so we don't know exactly how much we could increase the Prius."

(Source: Automotive News)