Japan Auto Plants Reopen Amid Supply Chain Woes

April 11, 2011

The following article is taken from Joseph Bonney's column for the 8 April 2011 edition of “Journal of Commerce Online” newsletter.

Japanese automakers plan to resume production at domestic auto plants this month but said they’re still struggling with shortages of parts and unreliable electrical supplies that will hamper output.

Supply chain problems resulting from Japan’s earthquake, tsunami and nuclear disaster have spread from Japan to the Americas, Europe and other countries in Asia. Plants outside Japan, including those of the Big Three U.S. automakers, have slowed or interrupted production to conserve parts that are in short supply.

Japanese plants of Renesas, which makes 40 percent of the global supply of microcontroller chips used in cars, were knocked out of production by the disaster and have been battling electrical blackouts as they try to get back into operation.

Toyota said it will resume production at half the pre-earthquake levels from April 18-27, before its plants close for Japan’s annual Golden Week spring holiday from April 28-May 9. Production after the holiday will be based on the availability of parts.

Toyota said the parts shortage has been gradually improving but it still is struggling to get around 150 types of parts. Toyota previously said there were shortages of about 500 types of components. The automaker has suffered a production loss of 260,000 cars since March 14.

Nissan said today it would resume domestic production at half capacity on April 11 and begin limited production April 18 at a parts factory that was hit by the tsunami. The automaker said it is unclear how long it can keep its entire Japanese operations running while supplies of components are tight.

Honda plans to restart all its Japanese car plants April 11 but the company said its production cuts in North America would be extended through April 18. The company’s CEO, Takanobu Ito, said the company hopes to return to pre-disaster output in Japan in two to three months.

Follow Joseph Bonney on Twitter @JosephBonney.

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Topic(s): 
Canadian Economy & Politics
Information Source: 
Canadian News Channel
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