Auto production in earthquake racked Japan is at a standstill this morning as most automakers closed plants even in non quake areas for announced times of three days to a few weeks.
In fact, no company can be sure when they will reopen plants. Moreover, rolling blackouts will disrupt public transportation and production throughout the country for unknown periods of time as damaged nuclear powerplants are repaired or scrapped, but first some of the reactors have to be brought under control after experiencing partial meltdowns.
Since “just in time” delivery has parts arriving at final assembly plants just hours before needed, suppliers will have to close as well since there is no place to store completed inventory.
Japan is just coming to grips with the growing havoc its largest earthquake in history has produced. As aftershocks continue, more tremors are expected and possibly another earthquake. Many office workers are being told to stay home for the time being.
The longer term implications of the earthquake disaster on the Japanese auto companies are just starting to emerge. First, it is clear that huge numbers of vehicles have been destroyed and will have to be replaced eventually in Japan.
Second, cars and trucks waiting export have been damaged and will cause some shortages and delivery delays throughout the world. How severe the economic effects will be on the Japanese auto industry as potential customers turn to other non-Japanese sources for replacement vehicles is difficult to gauge, but inevitably some production will be lost, along with revenue.
Toyota alone produced more than 3 million vehicles in Japan last year and exported 40% of them. Toyota’s Lexus brand, Honda’s Acura and Nissan’s Infiniti are heavily dependent on Japanese imports at a time when luxury sales are growing. This is likely an area of concern, but the high margin vehicles will no doubt be a priority when production resumes.
STATEMENT REGARDING STATUS OF JAPANESE EARTHQUAKE AND IMPACT ON NISSAN AMERICAS OPERATIONS
Following the earthquake in Japan on March 11 Nissan Americas has been working around-the-clock with its teams in Japan and abroad to assess the status of its employees and the impact on its operations. The following will serve as an update on Nissan Americas operations and is complementary to an update provided by Nissan Motor Co., Ltd. earlier today:
Employees
* All Nissan Americas employees and their families are safe and accounted for, including those on assignment in Japan and those traveling in the country on business. Some Nissan Americas employees who were traveling in country on business have already returned to their home countries while others are in the process of returning.
Facilities/Production
* All Nissan Americas manufacturing facilities remain operational and will continue normal production schedules until further notice.
* In total six of Nissan’s facilities in Japan have reported some damage to their buildings or equipment, including Iwaki Plant (Iwaki City, Fukushima Prefecture), Tochigi Plant (Kawachi County, Tochigi Prefecture), Yokohama Plant (Yokohama City, Kanagawa Prefecture), Oppama Plant (Yokohama City, Kanagawa Prefecture), Zama Operations Center (Zama City, Kanagawa Prefecture) and Honmoku Wharf (Yokohama City, Kanagawa Prefecture).
* Nissan’s Tochigi and Iwaki plants will suspend operations until Friday, March 18.
* Nissan’s Oppama, Kyushu, Shatai and Yokohama plants will suspend operations until Wednesday, March 16.
Vehicle Stock / Sales Impact
* Nearly 70 percent of the vehicles Nissan Americas sells in the region are produced in the region and manufacturing operations are continuing to operate on a normal schedule.
* In general Nissan Americas is operating with a sufficient days’ supply of vehicle stock on the ground in the region or already in transit from Japanese ports.
* Some U.S.- and Canadian-bound vehicles at the Port of Hitachi, Ibaraki Prefecture and other vehicles stored at the Miyagi Service Center (Tagajo City, Miyagi Prefecture) were damaged due to the earthquake and/or tsunami.
* Some Infiniti models and Nissan GTR and 370Z may experience delays in shipment to the U.S. and Canada with full impact still being assessed.
* A shipment of more than 600 Nissan LEAFs destined for the U.S. left port in Japan on March 10, just prior to the earthquake, and will arrive as scheduled. Future impact, if any, on Nissan LEAF supply continues to being assessed.
As the situation continues to develop Nissan Americas will provide routine updates as appropriate.
Akio Toyoda Statement: To All Those Affected by the Tohoku Earthquake
NEW YORK, NY (March 14, 2011, Posted at 8:45 EST) – Toyota Motor Corporation posted the following message today from President Akio Toyoda on its corporate web site:
I offer my prayers to all those who lost their lives in the March 11 Tohoku Earthquake and its ensuing aftermath, as well as my sympathy to the survivors and their families.
Not only is the struck region one of our production bases, those directly hit and vastly affected include our dealers, suppliers and numerous other partners.
With life the number-one priority, we want to do all we can to contribute to the relief efforts.
Determined to provide hope for not only those suffering and forced to undergo extreme hardships, but also for the region overall, we will do our utmost toward the realization of recovery.
Akio Toyoda, President
Toyota Motor Corporation