Cars after Japan's quake: Toyota, Nissan, and Honda plan to restart production
Despite the huge difficulties the Japanese car industry is facing, analysts say automakers will be able to recover in the year ahead.
As every car owner knows, it only takes one missing part to bring a car to a screeching halt. And the average car contains anywhere from 20,000 to 30,000 parts, many of which – even in American-made cars – come from Japan.Skip to next paragraph
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As disaster-hit Japanese automotive manufacturers and parts suppliers struggle to resume operations, the global auto industry hasn't quite come to a standstill, but it is suffering losses in production of hundreds of thousands of vehicles, amounting to billions of dollars.
"We’ve already seen production at GM, Ford, Renault, and Peugeot being disrupted,” says Christopher Richter, a Tokyo-based auto analyst for the Hong Kong-based CLSA investment group. “The auto supply chain is a bit like a house of cards; and there are going to be some surprises popping up in the form of sudden shortages down the line.”
“You’re going to see some very busy plants working all the shifts they can manage to try and get back on track later in the year,” says Mr. Richter.
Though companies say they are focusing on simple recovery, analysts point to the fact that companies are restarting plant production work so quickly after such a major disaster as evidence of a healthy bounce back.
Toyota, the world's largest car maker, had already been trying to recover from world-wide product recalls over the past year, when the 9.0 earthquake and subsequent tsunami struck Japan on March 11 knocking out power for large swathes of the country. It alone has lost production of at least 200,000 cars this month in Japan as a result.
Out of nearly 70 models, only three at two plants remained in production. Another 16 factories remain offline, including the popular Prius along with two other hybrids from its luxury Lexus brand. The majority of Toyota and Lexus assembly plants will not be operational until mid April due to shortages of fuel, supply line disruption, and power shortages.
“Even the cars that are being made, production is running on a day-to-day, almost car-by-car basis, because of parts shortages and supply-line problems,” says Paul Nolasco, a spokesperson from Toyota’s Tokyo offices.
“We’ve announced our working schedule for next week, and beyond that, nobody can say yet what is going to happen,” says Mr. Nolasco.
In spite of the production problems, Toyota has said that given the continuing extreme hardships faced by so many disaster victims, it is inappropriate to talk about the size of financial losses it has incurred.