March 28, 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

Because of Japan’s Problems, Auto Dealers See Trouble Ahead in Meeting Demand

At this point, most dealers in the United States say they have enough inventory to meet their needs, even though many Japanese parts and auto plants have been closed since the March 11 earthquake and tsunami, cutting output by at least 400,000 vehicles.

“As it stands right now, you can still go to any dealership and get any model you want,” Ivan Drury, an analyst with Edmunds.com, which provides car-buying information to consumers, said on Wednesday.

Still, the question for dealers is what happens next.

Robert Shrader, the general manager of Jim Coleman Infiniti in Bethesda, Md., said: “Every day things change, but we anticipate there is going to be some disruption.”

Infiniti, Nissan’s luxury brand, gets its full lineup from Japanese plants. The tsunami destroyed around 1,300 Infiniti vehicles that were awaiting shipment from a Japanese port to the East Coast

“What we have right now will probably hold us over for about 60 to 90 days,” said Mr. Shrader, who is still receiving regular deliveries. “The concern would be the summer.”

In March, new-vehicle sales increased at least 15 percent, according to several analysts’ forecasts; automakers are scheduled to report their results on Friday.

Mr. Drury said gasoline prices, which were rising quickly before the earthquake but have largely leveled off since, pushed many consumers last month toward smaller, fuel-efficient vehicles, many of which are imported from Japan, including its Prius hybrid.

While Toyota restarted production of the Prius and other hybrids in Japan on a limited basis this week, most of its plants remain closed or are making only parts. The plant that makes the Toyota Yaris, a subcompact sold in the United States, is expected to be down at least until late April, the trade publication Automotive News reported.

As a result, Toyota has told dealers in North America to stop ordering 233 different parts — out of a possible 300,000 — unless they are needed for a specific customer’s vehicle.

Honda and Subaru have begun slowing their North American assembly lines because they are running low on Japanese-made parts. The Ford Motor Company and the Chrysler Group are building fewer vehicles in some paint colors because a Japanese-made pigment is expected to be unavailable for another month or more.

Nissan said on Wednesday that it expected to resume normal operations at all but one of its Japanese plants by mid-April. The sole exception makes V-6 engines for several other plants and is expected to be fully repaired by the end of April, Nissan said in a statement.

Company executives are expected to decide in the next few days whether to begin shipping engines to Japan from a plant in Tennessee to make up for disruptions there. While Nissan has resumed building many vehicles in Japan, it said that it planned to shut its plants again all of next week.

The research firm IHS Automotive said that 13 percent of global automotive production was down last week and predicted that up to a third of the industry’s production capacity could ultimately be affected by the disaster.

Paul Newton, an IHS analyst, said in a report issued on Wednesday that automakers worldwide are in “a highly fluid and opaque situation, which will likely worsen significantly before improving.”

Many vehicles built in the United States and other countries use at least some Japanese parts, or else their parts makers rely on some chemicals or other products from Japan.

Shoppers could soon start seeing fewer Ford vehicles in “tuxedo black” and three shades of red, and Chrysler is restricting orders in 10 different colors made with the metallic pigment Xirallic from the German chemical company Merck. The shortage affects five of the eight colors in which the Chrysler 300 is sold and four of the seven colors for the Dodge Charger and Challenger, for instance.

Honda, which had already told its North American dealers that it would delay taking May orders for Japanese-made vehicles until it had more definitive information about availability, on Wednesday began shortening shifts at plants in the United States and Canada.

A Honda spokesman, Edward K. Miller, said the plants would remain open but operate for fewer hours each day so that parts supplies would last longer.

“The overwhelming majority of parts come from the U.S., but we are dependent on some Japanese parts,” Mr. Miller said. “It’s a global business and more efficient that way, but the magnitude of what happened in Japan was unforeseen.”

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