Report: Japan disaster to hit automakers globally

March 22, 2011

Report: Japan disaster to hit automakers globally

The Detroit News

Every major automaker worldwide will be affected by the disaster in Japan by mid-to-late April, according to a report released Monday by automotive forecasters IHS Global Insight of Northville.

“It is not a matter of if, but when,” said Michael Robinet, IHS’s Director of Automotive Forecast, in an analysis of the impact of the disaster that halted domestic vehicle production and affected the parts supply chain.

The ripple effect is already being felt at plants around the world but Robinet expects the impact to grow in the coming weeks and months because many automakers rely on Japanese-sourced components such as semi-conductors, integrated circuits, sensors and LCD displays.

Many of those parts were in short supply before the disaster.

Future shortages could include resins and synthetic rubber from Japan, the IHS forecasts, and the region has many engine and powertrain parts plants.

Ford Motor Co. holds meetings “hourly” as it scrambles to keep its supply chain intact and its plants running, said spokesman Todd Nissen.

IHS calculates Japan’s lost production at more than 337,000 vehicles by the end of this week — because all plants in that country have been idled since the quake — and 450,000 by the end of March, if all remain closed. The daily production loss is about 37,000 cars and trucks.

This week, Toyota Motor Corp. and Nissan Motor Co. plan to gingerly resume production of components for overseas plants and later in the week restart vehicle assembly in Japan.

Robinet said it could take seven weeks of full production, with overtime, for each facility to make up for one week of lost production. Japan accounts for about 13 percent of global production, he said.

Some of the most fuel-efficient Japanese vehicles are built in Japan and as supplies diminish, prices will creep up and incentives will evaporate, said IHS analyst Aaron Bragman in a separate report released Monday. says prices of Japanese models in the U.S. are rising already, with the Toyota Prius up $169, on average, in the past week, Bragman notes.

“If the supply of imported Japanese fuel-efficient vehicles cannot be restored quickly, an opportunity may arise for well-placed competitors to start stealing U.S. market share from Japanese automakers,” Bragman said.

Ford is well-situated, with a number of new models that get 40 mpg. General Motors Co. also has new small vehicles, including the Chevrolet Volt hybrid. Hyundai Motor Co. has strong contenders for those buyers, too.

Ford is seeing no additional sales blip because of a shortage of Japanese models, in part because it is too early to detect such signs, said sales analyst George Pipas.

Gas prices created a demand for smaller vehicles and hybrids. Ford has a 40-day supply of those vehicles, compared with 60 days on average, Pipas said. “The domestics are not in a situation to take advantage of anybody,” Pipas said, given inventory levels.

Chrysler Group LLC met with its dealer council late last week, and no one reported increased showroom traffic because of the Japanese crisis, said spokesman Ralph Kisiel.

Competitors can capitalize on shortages only if they have the parts to keep their own plants running.

All are monitoring their supply lines closely.

So far, lost volume outside Japan is only about 10,000 vehicles, according to Robinet. That includes GM’s truck plant in Shreveport, La., which suspended work because of parts shortages.

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