June 24, 2024

Japanese Carmakers to Restart Limited Production

Taken together, the Friday developments offered a glimpse of how Japan is gradually returning to normal after the disasters of March 11.

But the process is a slow and painful one: business sentiment remains fragile, and many companies still face considerable disruption, not least because sporadic aftershocks are continuing to rattle the country.

Toyota, whose Japan-based plants build nearly half the vehicles the company sells worldwide, said it would resume production at its Japanese facilities from April 18 through April 27. However, the plants, which have suffered supply-chain problems, will operate at only 50 percent capacity.

The factories are then to be closed for their regular spring holiday through May 10. No decision has been made about whether, and to what extent, operations will resume after the spring vacation, Toyota said in a statement.

Nissan and Honda also announced that their closed factories would soon reopen, at half capacity .

Meanwhile, a government survey of service-sector workers, released Friday, highlighted the toll that the disaster had taken on business confidence. The so-called economy watchers poll, which regularly questions workers like hotel and restaurant staff members, barbers and taxi drivers, showed sentiment plummeting from a reading of 48.4 in February to 27.7 in March.

Separately, the Japanese central bank, in its monthly assessment of the economy Friday , said it expected the economy to “remain under strong downward pressure, mainly on the production side, for the time being.”

A “moderate recovery” will kick in once production regains traction, the bank added. But for now, businesses and consumers are having to grapple with the disruption the disaster has wrought on the nation’s power system, and on the supplies of parts and components needed by manufacturers.

Worries about radiation leaking from the quake-stricken Fukushima Daiichi Nuclear Power Station also continue to weigh heavily on sentiment and are expected to lead to a sharp drop in consumer spending.

Meanwhile, a severe aftershock Thursday served as a stark reminder that the country remained susceptible to further tremors and tsunamis.

With a magnitude of 7.1, the tremor was much less severe than the 9.0 earthquake of March 11. Still, it was enough to cause several new plant closures. Sony, the chip maker Renesas, and Elpida Memory said Friday that production at some factories in northern Japan had been halted again because of power failures, Reuters reported.

“Economic data releases will be hard to interpret for the next few months,” Richard Jerram, a regional economist at Macquarie in Singapore, commented in a research note Friday. Anecdotal evidence and data from companies should give a sense of the economic effects, Mr. Jerram said, but “this tends to be hard to translate to a broader macro scale.”

Article source: http://www.nytimes.com/2011/04/09/business/global/09yen.html?partner=rss&emc=rss

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