Toyota shifts manufacturing to compensate for Thailand flooding  The world's biggest automaker, Toyota, announced this week that its domestic manufacturing output has nearly returned to pre-crisis levels.

Japan-based Toyota has struggled this year in the wake of the 9.0-magnitude earthquake and subsequent tsunami that battered the island nation in March. Many of the factories operated by Toyota – along with rivals Honda and Nissan – were severely damaged when the tsunami struck, as a majority of the country's car making is centered in the hard-hit Northeastern regions.

On Monday, Toyota said Japanese manufacturing had hit "near-normal levels." Company executives have been loath to move production offshore, as they are endeavoring to implement business cost reductions, even in the face of mounting cost constraints.

The BBC reports that partial production at three of Toyota's factories in Thailand also resumed this week. Aside from their domestic manufacturing woes, Toyota and other Japan-based automakers have struggled to keep costs down as the yen, the nation's currency, has appreciated over the past year. As the yen continues to gain value against the greenback, it costs Japanese carmakers a substantial amount of money.

Toyota's manufacturing facilities in Thailand were affected by record flooding that struck that country last week, according to the news provider. Flooding in Thailand was the most severe in decades, officials said, forcing many other businesses to completely shutdown production in the Asian nation.

The slowdown in manufacturing this year has eroded Toyota's earnings. In fact, Toyota's profits between July and September are down more than 18.5 percent from the same period in 2010, as the company has been forced to shift manufacturing to its plants in other countries.

To compensate for its reduced production capacity in Asia, Toyota ratcheted up manufacturing at its North American factories, Bloomberg reports. Its manufacturing plants in North America are currently running overtime to help make up for the reduced output in both Japan and Thailand. Still, Toyota executives said the supply constraints were more limited than they initially projected.

"Early on we didn’t know how bad it could be, but it ended up being a false start," Toyota U.S. sales president Jim Lentz said. "Whatever impact it had is behind us."

As a result of the shock to its supply chain, Toyota executives were forced to withdraw the company's yearly sales and profits forecasts, according to the BCC.

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