Japan auto production loses half a million units since earthquake

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Toyota was hit hardest by the Japan quake and warned of severe North American vehicle shortages in the third quarter. Image: Flickr/Jeff Glucker's photostream CC-BY-SA

The Japan earthquake has wiped out production of more than half a million vehicles in the country’s auto industry in the last month. Toyota was hit hardest and warned that the U.S. auto market could see shortages of certain vehicles in the third quarter of 2011. Japan’s auto production disruptions have also affected Ford, which said parts shortages could have a negative effect on earnings.

Japanese auto industry struggles to rebound

One month after the March 11 earthquake and tsunami that devastated Japan’s northeast coast, the country’s biggest automakers announced that 516,000 units of output had been lost and the total is yet to be determined. Auto plants that have resumed production are at limited capacity and many others are expected to remain offline until late April. Toyota closed all 18 of its plants in Japan following the earthquake and has reopened just two. The company said it will bring the remainder online by April 18 but expects full production to continue only until April 27 because of parts shortages. So far Toyota has lost 260,000 units of volume. Honda resumed operations at its two Japan plants Monday at half capacity and had lost about 58,000 units by April 8. Nissan is operating five domestic plants at limited capacity and is behind about 55,000 units. Suzuki, Mazda, Subaru and Mitsubishi have fallen behind a combined total of about 157,000 vehicles.

Aftershocks ripple across North America

In North America, where Toyota makes nearly 60 percent of its operating profits, the automaker said it will suspend production for five days in April because of shortages of components made in Japan. Toyota has an inventory of more than 300,000 new vehicles for sale in the U.S., which is projected to be an adequate supply until mid-May. Because of production cutbacks, the company may fall behind by 35,000 cars and light trucks at North American factories by April 25. Uncertain vehicle production forecasts for May through July could significantly affect the supply of new Toyotas in North America this summer. High mileage cars such as the Toyota Prius and Yaris will be very hard to find. Along with reduced vehicle inventory, Toyota also expects some paint colors to be scarce because of a damaged chemical manufacturing plant in Japan.

Ford warns of quake effect on earnings

Ford, like most U.S. automakers that rely on parts and components made in Japan, announced in a securities filing with U.S. regulators that supply disruptions could negatively affect the company’s financial performance. Ford had already halted operations at its plants in the U.S. and Europe because of parts shortages and said its operations at 13 plants in the Asia-Pacific region could be affected from late April through May. General Motors has also been suspending production and rescheduling shifts at U.S. plants as it adjusts to supply disruptions. Production at most other automakers worldwide has been affected by parts shortages resulting from the Japan earthquake.


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