Japan’s carmakers halt domestic operations

By John Reed, Motor Industry Correspondent
Published: March 14 2011 13:00 Last updated: March 14 2011 13:00
Japan’s four biggest carmakers have said they are suspending production at their domestic plants through to at least Wednesday to cope with the after-effects of Friday’s earthquake and tsunami.

Honda, Japan’s second-largest carmaker, said on Monday that it was halting domestic production for a week and that damage to its suppliers’ plants might disrupt its UK production.

The announcement was an early sign of the disaster’s potential knock-on effect on the global supply chain in one of the world’s largest industries. Toyota, Nissan, and Mitsubishi Motors also extended shutdowns of their plants in order to assess and deal with damage from the quake.

Honda on Monday said that it had shut down its plants to check safety, power supply and infrastructure issues, along with the state of its local suppliers.

Honda said that it had 113 suppliers around the area in north-east Japan where the main tremors from the earthquake were felt. The carmaker said that it had been in touch with 44 of them, but was still trying to contact the remaining 69.

A UK spokesman for Honda said there were “potential supply issues” at its car plant in Swindon, England, where it makes its CR-V sport utility vehicle, its Jazz small car, and its Civic mid-size model.

“There will be a knock-on effect for car production in the UK, but we don’t yet know what it is,” he said.

Honda said that it had established emergency co-ordination centres in Swindon and at its plant in Tochigi in Japan in order to liaise on business issues concerning its supply of components and the well-being of its employees.

Toyota, Japan’s and the global car industry’s biggest producer, on Monday said that a shutdown already planned for Monday at all of its Japanese plants – including those of its Hino and Daihatsu subsidiaries – would be extended through to Wednesday.

The company makes some of its most popular models – including the bulk of its Prius hybrid model and Lexus luxury marque’s cars – in Japan.

Toyota said that the current three-day halt to production would not immediately affect its overseas operations. “The current production stop is for three days”, said a Toyota spokesman based in Brussels. “As such this doesn’t have an impact outside Japan, but we need to assess further.”

Nissan, Japan’s third-largest carmaker, said that it would halt operations at its Oppama, Kyushu, Shatai, and Yokahama plants south of Tokyo until Wednesday and at its Tochigi and Iwaki plants north of Tokyo until Friday.

The company also said that it would do its utmost to support “restoration activities” in Japan, including by conserving electricity usage in all of its activities.

Mitsubishi said that it was suspending plant operations on Monday and Tuesday to check safety at its suppliers. The producer’s main production hubs are located in Japan’s Aichi, Gifu, and Okayama prefectures, and were not affected by the earthquake.

However, it said that some of its suppliers had reported damage.

Japan’s car industry is one of the world’s largest. North-eastern Japan has become a major car-production centre in recent years, with Toyota, Honda, Nissan and operating plants there.

Most global carmakers, including Japan’s, produce and source parts for most of their cars in the regions where they build them.

However, Japan’s producers in particular are known for producing some of their models destined for export locally in order to preserve jobs and expertise at home in the face of declining domestic demand for cars.

Source;
http://www.ft.com/cms/s/0/8d5f631e-4e2a-11e0-a9fa-00144feab49a.html#axzz1Ga6cJOuQ