- IRS official refuses to answer questions at scandal hearing |
- Global stocks, oil fall after Bernanke; dollar gains |
- Oklahoma tornado victims astounded at how they survived |
- CORRECTED-White House threatens veto of bill to bypass Obama on Keystone
- British soldier hacked to death in suspected Islamist attack
Quake impact may spread beyond Japan automakers
PARIS (Reuters) - The closure of Japanese car and parts plants poses a threat to the auto industry's global supply chain and companies are hoping the disruption does not last long enough to affect parts deliveries and customer shipments.
Japan's major car plants were shut following Friday's devastating earthquake, in which officials say at least 10,000 people were killed, and remain closed as power supplies are disrupted and companies struggle to gather information amid the chaotic situation in the country.
Such is the integration of the global industry, car makers and component manufacturers outside Japan relying on Japanese suppliers for components or custom will feel the effects if efforts to restart production in Japan take some time.
British parts maker GKN Plc (GKN.L) said on Tuesday it may have to cut the number of components it makes because some of its Japanese customers, which include Mitsubishi (7211.T) and Nissan (7201.T) may be unable to take deliveries.
French car parts maker Valeo's (VLOF.PA) five factories in Japan, which supply local car makers, are operating but it was too soon to say if they would have to lower the rate of production a spokeswoman said.
Sweden's Autoliv (ALIVsdb.ST) (ALV.N), which has about 1,700 employees in Japan, said its plants had not been directly affected by the disaster and it had no plans to evacuate staff.
At PSA Peugeot Citroen (PEUP.PA), Europe's second-biggest car maker, a spokeswoman said the company sourced electronic components in Japan but had reserves of these in Europe as they were delivered by ship, taking six weeks. Production had not been affected so far but PSA was assessing the situation.
BMW (BMWG.DE) management board member responsible for purchasing Herbert Diess told Reuters there was no immediate threat for Japanese "tier 1" suppliers, which make up less than 1 percent of its total purchasing budget worldwide.
"We certainly need seven or eight days to analyze the situation at the second and third tier though," he said.
German tire maker Continental AG (CONG.DE) said it was checking with its Japanese suppliers and did not know if there were interruptions in the supply chain.
For Japanese companies, one of the major impacts could be on the position of their luxury brands in China, already the world's biggest car market and which boasts one of the fastest growing luxury segments.
Unlike other foreign manufacturers, Nissan, Honda (7267.T) and Toyota (7203.T) export their luxury cars to China instead of producing locally. Exports to China will suffer now the big three have shut their Japan plants, though Nissan chief Carlos Ghosn said on Monday he hoped Nissan plants in Japan could be starting to produce again in two to three days.
Honda has suspended production in Japan until March 20 and said on Monday it set up an emergency coordination center at its UK plant in Swindon. UK operations had not yet been hit but source parts from Japan.
Nomura analysts wrote in a research note that of the European car makers, Renault would be the only one affected, because of its cross-shareholding with Nissan, but any impact would be tiny -- about 1 percent of net profit.
Among Japanese car makers Nissan, which has an engine factory in the region supplying around 12 percent of its global need for engines, might be hardest hit.
Goldman Sachs said the profit impact of stopping production in Japan for one day would be about 6 billion yen ($73.3 million) for Toyota and 2 billion yen for Honda and Nissan.
Truckmakers Daimler and Volvo (VOLVb.ST) with significant production in Japan were also exposed, but even if they suffered in the short-term could see rising demand later for trucks once rebuilding gets underway, they added.
Volvo said it had halted production at its Japanese unit UD trucks' four plants until March 21 and asked all its employees in Japan to stay at home.
"The deliveries from UD Trucks suppliers in the near future are very uncertain and ... teams from UD Trucks will work closely with the suppliers to establish their status," the company said in a statement.
(Additional reporting by Fang Yan, Don Durfee, Jan Schwartz, Christiaan Hetzner, Niklas Pollard and Rhys Jones; Editing by Lincoln Feast and David Holmes)
- Tweet this
- Share this
- Digg this