Japanese automakers plan to resume production at some plants in Japan last week but cautioned that disruptions to international supply chains will continue in the wake of the March 11 earthquake and tsunami that killed thousands.
Carmakers; Toyota and Honda have delayed plans to restart production, saying that they cannot get the parts they need.
While Toyota will not restart production before March 26, Honda Motors says it had extended a production shutdown until at least March 27.
Japanese automakers plan to resume production at some plants in Japan last week but cautioned that disruptions to international supply chains will continue in the wake of the March 11 earthquake and tsunami that killed thousands.
Carmakers; Toyota and Honda have delayed plans to restart production, saying that they cannot get the parts they need.
While Toyota will not restart production before March 26, Honda Motors says it had extended a production shutdown until at least March 27.
The firms had halted operations after Japan was hit by a deadly earthquake and tsunami.
Analysts said the shutdown would cost companies millions of dollars a day.
A spokeswoman for Honda said that the company now expected delivery of new vehicles in Japan to be delayed.
Assembling a car required thousands of parts to be put together. These are provided by different suppliers.
Most of the parts were shipped to the manufacturers a short time ahead of the assembly line requirements, analysts said.
This meant that most car factories have relatively low inventories, which can create shortages in supply.
Until the supply chain was sorted out, analysts warned that plants would not be able to operate at full speed and there may be patchy production across the country.
“Each supplier has to be able to reach the levels before the devastation to reach the full production plan,” said Vivek Vaidya of Frost & Sullivan.
Manufacturers of Japanese cars in other countries were not so severely affected by the shortage of parts.
Paul Ormond of Honda United Kingdom said the firm’s site in Swindon was not running at full production at present and therefore did not need so many components.
“We will probably be building 160,000 cars with the potential production capacity of 250,000, so that will actually mean we don’t need to have a full inventory until we get to that level, which won’t be for another year to 18 months,” he told BBC News.
To get back to full speed, Japan’s car manufacturers have not only got to overcome their own issues, but also wait for external factors to get sorted.
To begin with, they need uninterrupted power supplies, which analysts said would take some time given the situation at the Fukushima Daiichi plant.
Problems with Fukushima Daiichi nuclear plant have resulted in power disruptions in Japan
“A significant percentage of Japan’s electrical generating capacity has been taken offline, and is unlikely to be restored soon,” said Aaron Bragman of IHS Global Insight.
Discussion about this post