Earthquake in Japan impacts some automakers, effects on industry as a whole considered limited

12:51, April 22, 2011      

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Lexus GX series cars sit in the lot at a Lexus dealer in Los Angeles. (Xinhua/AFP File Photo)

Participants in the ongoing Shanghai Auto Show 2011 believe that the March 11 earthquake and tsunami in Japan will hamper the production and expansion plans of some transnational automakers, but that in the long run the disasters' effects on the global market will be limited.

Reports indicate that leading Japanese carmakers Honda Motor Co., Toyota Motor Corp. and Nissan Motor Co. have relocated part of their vehicle production facilities, but that most of Japan's auto parts manufacturing remains at home. Some of the major Japanese components suppliers have shut down production facilities, threatening supply chains for downstream manufacturers at home and abroad.

Li Hui, vice general manager with GAC Toyota Motor Co., Ltd., a Sino-Japanese joint venture based in southern China's Guangdong Province, said at the Auto Show that the company managed to maintain normal production in April, but output in May and June will be uncertain.

Toyota's latest company statement says that the company plans to resume production at all of its plants from April 18 to 27, with daily production to remain at half of the pre-quake level.

Toyota spokesman Masami Doi said that Toyota has been unable to purchase approximately 150 types of components and parts. Doi stated that he did not know when the disrupted supply chain would be restored and when vehicle manufacturing would return to normal; therefore, Toyota currently has no expansion plans.

Further, company sources said that all of Honda's assembly lines resumed production on April 11, but its parts suppliers could only provide parts at 50 percent of pre-tsunami levels.

Seiji Kuraishi, who is in charge of Honda's operations in China, said at the Auto Show that he expects no suspension of production for Honda's assembly lines in China before the end of May, since stored parts will be available to meet production needs.

Nissan said that all of its assembly facilities in Japan resumed production on March 24, but at half capacity, and its parts suppliers have not yet resumed normal provision of supplies.

The disrupted parts and components supply chain has also begun to affect some transnational vehicle manufacturers based in other countries, particularly hampering their expansion plans.

Christoph Stark, President and CEO of Greater China BMW Group, said that many BMW products have been in short supply, not only in China, but also in Germany, Britain and the United States. It will be difficult for the German automaker to meet the demand for the time being. Production expansion is imperative yet will be hampered by the earthquake and tsunami disasters in Japan, as the manufacturing of some electronic parts have been affected, according to Stark.

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