The Economy: Car Sales Slide On Japan Cuts

Toyota's Altona car making plant in Melbourne is expected to return to full production from this week.

As well direct imports from the company's plants in Japan and Thailand will also start rising pre-March 11 levels in coming weeks as the impact of the earthquake and tsunami continue to ease.

The Altona plant - which produces Camry, Hybrid Camry and Aurion models - has been operating at 50% capacity since May 9 when the company ran short of essential parts from suppliers in Japan and Thailand.

The supply crunch hit the May sales of Toyota, contributing heavily to a sharp 13.2% fall in Australian car sales last month.

The official May car sales from the Federal Chamber of Automotive Industries (FCAI) showed that 77,406 passenger cars, SUVs and commercial vehicles were sold in May 2011, down 11,812 vehicles compared with May 2010, but up from the 74,212 sold in April.

The fall for both months (though April was impacted by the late Easter and then the Anzac Day combined holiday at the end of the month) means car sales have joined housing, the economy generally, exports, retail sales, the rural sector, construction and employment in being hit by factors beyond their control in the past five months.

Most of the damage was done by the floods in January and February (although April saw more problems for central Queensland coal exporters from bad weather).

An idea of the dollar impact on the car industry of the Japan disruption was given in last week's April trade figures from the Australian Bureau of Statistics.

The ABS produced figures on the impact of those disasters on Australia: it was weighted heavily towards imports, specifically cars.

"Between March and April 2011 merchandise imports from Japan fell $711m (48%) due primarily to a fall of $494m (81%) in the non-industrial transport equipment component," the ABS said.

The rebuilding of output by Toyota in Australia follows news late last week that the car giant was accelerating the expansion of production at plants in Japan, China and Thailand at a much faster rate than projected in May.

According to the FCAI figures, the slowdown in supplies to Toyota meant that Holden was the best selling manufacturer for the first time since March 2005. Hyundai again held off Ford in third position, while Kia jumped ahead of Honda to round out the top 10. Mazda was also weak with supplies from Japan under pressure.

Toyota lost top spot to Holden by only 71 cars, after a drop of 38.1% in the month, compared with the same period last year. Models including the Prado, Prius, RAV4 and Yaris all suffered sales drops of more than 50% last month because of the shortages.

Toyota's top commercial model for tradies, the HiLux, which is built in Thailand, helped the Japanese giant by being the second best-selling vehicle in May after the Holden Commodore.

Other Japanese makers all lost sales in May: Subaru (down 32%), Mitsubishi (down 18.3%), Mazda (down 14.2%), Nissan (down 12.4%) and Suzuki (down 3.4%).

The Top 10 sellers in the month by make: