November 10, 2011 / 2:57 PM / in 8 years

Flood impact on Honda spreads, Toyota slowly recovers

TOKYO (Reuters) - The impact of Thailand’s floods on Honda Motor Co (7267.T) extended to a fourth continent even as Toyota Motor Corp (7203.T) showed further signs of recovery from the disaster.

A visitor is reflected on a Toyota car at the company's showroom in Tokyo November 8, 2011. Toyota Motor Corp posted a 32 percent drop in quarterly operating profit and withdrew its full-year profit forecasts as Thai floods pose a fresh threat to production while supply shortages from the March earthquake kept output low. REUTERS/Toru Hanai

Thailand’s worst floods in half a century have hit Honda the hardest among Japanese automakers, with its 240,000-cars-a-year plant and about 35 of its tier-one suppliers under water.

A spokesman for Japan’s third-biggest automaker said on Thursday the company had started to cut output in Brazil this week following a reduction at its factory in Britain from October 31.

The floods inundated hundreds of parts suppliers, forcing many automakers to halt work in the country and reduce output elsewhere.

Japanese automakers, which dominate the southeast Asian market, were hit just as they were beginning to work extra hours and days to make up for massive production losses after the March 11 earthquake and tsunami in Japan.

Honda’s production in North America would be affected for several more weeks, the company said on Tuesday.

It had previously announced that production at several Asian factories, including Japan from this week, would also be lowered.

Honda has not disclosed how much production has been cut. Both Toyota and Honda have withdrawn their profit forecasts for the year to March, citing uncertainty about production.


Toyota President Akio Toyoda said on Thursday his company was still examining the right timing for a full resumption of production in Thailand, after a decision a day earlier to restart partial operations at its three factories in the country on November 21.

Toyota also said on Thursday it would continue production at reduced levels in Asian countries excluding Thailand and in Sough Africa next week.

Japan’s biggest automaker said its North American plants would bring back planned overtime, which had been postponed because of the floods, from November 14, and its Indiana and Canadian factories will operate on Saturday, November 19, as originally scheduled.

Thailand’s disasters have hit automakers in varying degrees.

Nissan Motor Co (7201.T), Japan’s No.2 vehicle maker, has said lost output would amount to 60,000 vehicles at most, with a partial restart planned in Thailand from November 14.

A Thai joint venture between Mazda Motor Co (7261.T) and Ford Motor Co (F.N), as well as Mitsubishi Motors Corp’s (7211.T) local factory, are also set to resume work next week.

Shares of Japanese automakers fell in a broad decline in Tokyo on Thursday. Toyota, Honda and Nissan lost 1.7 percent, 3.2 percent and 3.6 percent respectively. The Topix .TOPX index shed 2.6 percent.

Additional reporting by Yoshiyuki Osada in Nagoya; Editing by Matt Driskill and David Holmes

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