Automakers shut plants in Japan after earthquake
Workers assemble Yaris compact sedans, set for export to North America, on a newly opened assembly line at a plant of Toyota Motor Co.'s group company Central Motor Co. in Ohira in Miyagi Prefecture, northern Japan, Wednesday, Feb. 16, 2011. (AP / Koji Sasahara)
Published Tuesday, March 15, 2011 11:27AM EDT
WASHINGTON - Toyota, Honda and Nissan halted production in Japan for most of the week after a devastating earthquake and tsunami. But all three build most of their Canadian-sold cars in North America, so Canadians shouldn't see a shortage.
The companies are suspending production to assess damage to plants, ports and roads following the natural disaster, which was centred in northern Japan, killing thousands, destroying towns and wrecking the infrastructure of the world's second-largest auto producer.
Supply of some fuel-efficient cars such as the Toyota Prius hybrid, Toyota Yaris and Honda Fit, may be affected because they are built exclusively in Japan and could become more desirable if gas prices continue to rise.
"There could be some issues where customers don't get the exact vehicle that they want," said Jessica Caldwell, an automotive analyst with auto website Edmunds.com. "But I would say it doesn't look like the inventory situation right now looks dire."
Top sellers such as the Toyota Camry, Honda Accord and Nissan Altima -- all sedans -- are made in North America. Barclays Capital analyst Brian Johnson said he expects the companies "to maintain adequate inventory for most vehicles."
Japan made nearly 7.9 million vehicles in 2009, or about 13 per cent of the 61.7 million vehicles produced worldwide that year, according to the International Organization of Motor Vehicle Manufacturers. The U.S. is its largest market, taking in 1.2 million Japanese vehicle imports, according to the Japan Automobile Manufacturers Association.
In Japan, Toyota Motor Corp., the world's biggest automaker, said it was shutting down production at its 12 wholly-owned factories through Wednesday and also suspending factories that it partly owns. The closures are expected to affect production of about 40,000 vehicles.
Closures include a plant that builds the Yaris subcompact, and another that makes the Scion xB and xD, two small cars popular with young drivers.
Toyota spokesman Javier Moreno said the company has a bigger supply of the Prius because of recent incentives to promote "eco-friendly" cars. "We expect that the impact from the shutdown will be minimal," he said.
Toyota made about 8.5 million vehicles in 2010, including about 4 million in Japan. About half the vehicles made in Japan were exported.
But nearly 70 per cent of Toyotas sold in Canada and the U.S. are made in North America.
Nissan Motor Corp. said it will shut down production at four Japanese plants until Wednesday and will suspend production at two plants until Friday. Nissan said some of its luxury Infiniti models and Nissan GTR and 370Z could be delayed reaching the U.S.
About 1,300 Nissan vehicles bound for the U.S. were damaged at Japan's Port of Hitachi in Ibaraki prefecture along with 1,000 vehicles being stored at a service centre in Miyagi, the company said.
Rebecca Lindland, director of strategic review at consulting firm IHS Automotive, noted that shipping vehicles from Japan to the U.S. can take weeks. "So it's not likely if you were expecting delivery this week or next that you'd be impacted. It's the people that are four, six and eight weeks out that (are) going to see a delay in that delivery process."
A shipment of more than 600 U.S.-bound Nissan Leaf electric cars left Japan on March 10, just before the earthquake, and the company said the cars will arrive on schedule. Nissan said it will continue to assess any impact on Leaf supply.
All of Nissan's American plants are operating and will continue normal production until further notice, the company said Monday. Nearly 70 per cent of Nissan vehicles sold in the U.S. are made in North America.
Honda Motor Co. said it was suspending production at six Japanese plants through the end of the week, along with a research and development centre and an engineering office in Tochigi.
About 80 per cent of the vehicles Honda sells in the U.S. are built in North America.
Honda spokesman Ron Lietzke said U.S. market versions of the Honda Fit, Insight hybrid, Civic hybrid and CR-Z hybrid are all built exclusively in the Japanese plants, along with the Acura TSX and RL.
Lietzke said the plant shutdowns would affect production of 16,600 automobiles and 2,000 motorcycles.
Mazda Motor Corp. said it was suspending production Monday and Tuesday at plants in Hiroshima and Hofu due to a shortage of parts supplies.
Parts suppliers will be a key indicator of how quickly the industry recovers in Japan _ and whether the shutdowns last beyond the week.
"Every vehicle is so incredibly complex and many of the parts are made specifically for that vehicle so you can't necessarily swap them out for another part. It's just not that easy," Lindland said. "So that's the main problem right now ... whether the suppliers can get back up and running."