* Toyota says 12 main plants out until March 22 at least
* Yen tests record high vs dollar after quake
* Toyota has largest domestic production ratio, most
* Japanese auto stocks rebound after two-day rout
(Updates details of plant closures in Japan.)
By Tim Kelly
March 16 Japanese auto makers, led by Toyota
Motor Co , are struggling to restart production amid a
shortage of parts and workers, and must now worry about a
profit-sapping surge in the yen after Japan's biggest
Toyota, the world's No.1 automaker, said on Wednesday it
will keep its 12 local assembly plants shut for a further week
at least. The plants have been closed since Friday's 9.0
magnitude earthquake unleashed a tsunami which killed at least
10,000 and damaged a nuclear plant north of Tokyo.
Toyota's largest domestic rival, Nissan Motor , said
it would restart two plants on Thursday and Friday, but
production beyond that remained uncertain. Other plants would
take longer to get back on line.
No.3 Honda Motor has also idled plants and on
Wednesday reiterated its plans to suspend all production in
Japan until at least Sunday.
Analysts said if production starts within a couple of week,
excess capacity resulting from the dip in global car sales after
the financial crisis of 2008 means the automakers may be able to
make up for lost output.
But with the Japanese currency nearing a record high, the
profit margin on their Japan-made cars will shrink.
"The direction of the Japanese yen over the next three to
six months as a result of this catastrophe will also affect the
profitability if Japanese automakers," Fitch Ratings said in a
The dollar has fallen 3 percent against the yen
since the disaster and is now close to its all-time low. The
dollar traded around 80.8 yen on Wednesday, just a yen away from
79.75 in 1995.
Traders and investors are watching for signs of
repatriation by Japanese investors and companies because after
the Kobe earthquake in 1995, the yen surged to an all-time high
against the dollar based on similar flows. So far though most
traders have not seen repatriation taking place.
PLANTS REMAIN IDLE
Toyota still builds 38 percent of its vehicles in Japan,
making it the most exposed to the crisis and the resulting rise
in the value of the yen. It ships more than half of its domestic
output to overseas markets. Nissan produces 24 percent of output
in Japan while the figure for Honda is just 22 percent.
Toyota said on Wednesday that it would restart some parts
production on Thursday at seven small plants near its home base
in Toyota city. The same plants from Monday will also begin
shipping car components for assembly overseas.
Yet, until it can restart its main factories lost
production, which over the past three days has risen to about
40,000 vehicles will mount.
Elsewhere, it has cut over-time production at plants in
Thailand and North America while it assesses the impact on
Amid a general rebound in stocks Wednesday, Toyota closed up
9 percent, with Nissan up 6 percent and Honda 3.9 percent
Goldman has estimated the profit impact of stopping
production for one day would be about 6 billion yen ($74
million) for Toyota and 2 billion yen for Honda and Nissan.
Koji Endo, managing director of Advanced Research Japan in
Tokyo, said plants were likely to start resuming production next
week and should be back up to full capacity by the end of the
"Even if those companies lose say 100,00, 150,000 units
until the end of March I think they can recapture that lost
opportunity from April," he said
Auto production in Japan is concentrated in central of and
southern regions, with few big plants in the worst affected
areas. Plant shutdowns could start affecting global automakers
and parts suppliers within two weeks due to the integration of
Hyundai Motors in neighboring South Korea said
it doesn't expect the Japanese auto industry's woe to affect it.
"We do not see a major impact from Japan's earthquake because
we have secured an inventory of one to two months," a
Those Japanese parts makers that do ship products to Hyundai
were not directly affected by the earthquake, she added
Hyundai and affiliate Kia Motors will be less
affected by parts supply disruption from Japan than their U.S.
and European peers because they source most of their components
from South Korean firms, Mo Se-jun, an analyst Hana Daewoo
"It remains to be seen whether South Korean carmakers will
benefit from the disaster as Japanese carmakers have a two-month
car inventory," Mo said.
(Additional reporting by Hyunjoo Jun in SEOUL; Editing by