March 29, 2011. Copyright 2011, Graphic News. All rights reserved

Japan quake impact on global industry clouded by conflicting reports
    By Neil Winton

LONDON, March 29, Graphic News: News about the possible impact of the Japanese earthquake, tsunami and nuclear power plant disaster on the global automotive industry has been confused and contradictory.
    Nissan Motor’s Chief Operating Officer Toshiyuki Shiga said his company expected to resume full production in a matter of weeks, not months. 
    At the same time, IHS Automotive, the U.S. based consultancy, said global automakers may have lost production of 600,000 vehicles by the end of March, and shutdowns would gather pace because of component shortages.
    “The next surge of shutdowns comes when the pipeline of parts that were already built dries up,” IHS Automotive vice-president Michael Robinet said in an interview from Lexington, Massachusetts.
    At the same time, Reuters reported from Tokyo that lost auto and truck output since the disaster struck on March 11 exceeded 330,000 vehicles and it could be months rather than weeks before Japan’s auto manufacturers get back on track.
    Nissan’s Shiga, who is also chairman of the Japan Automobile Manufacturers Association, was hopeful and upbeat about his own company’s prospects, which are unlikely to be markedly different from the other two Japanese giants Toyota and Honda.
    “Recovery efforts are progressing much more quickly than we had anticipated. It is too soon to say exactly when production will recover 100 per cent, but we expect it to be a matter of weeks, not months,” Shiga told the Wall Street Journal.
    Shiga reckoned that the Japanese industry should be able to get a full reading on even the smallest suppliers by mid-April.
    Meanwhile, another threat to production emerged as questions mounted over power supplies. With capacity cut by the nuclear disaster at Fukushima, the shortage is likely to worsen as more factories come online after recovering from the earthquake.
    In Europe, Peugeot Citroen, Porsche, Jaguar, Opel-Vauxhall, VW, BMW, Mercedes and Ford have all reported production interruptions. Many American and Japanese plants in the U.S. are also reliant on important components and face problems.  
    One Japanese component supplier that was causing great concern was Renesas Electronics Corp, which provides about 20 per cent of the global industry’s micro control units. This production would not easily be  replaced and would impact between 7.5 and 11 million vehicles. Renesas Electronics said it would resume manufacturing microcontrollers used in engines, transmissions and telematics at its Naka factory by July.
    Meanwhile U.S. ratings agency Standard & Poors attempted to take a long-term view of the crisis.
    “No (big) Japanese automakers or auto suppliers suffered serious damage, such as the loss of main factories, following the catastrophic earthquake and tsunami that hit northeastern Japan on March 11, 2011,” S&P said.
     The agency did say that full production might not return until at least early April because of key component shortages, but that everything would return to normal soon.
    “The suspension of production (is) temporary and  most Japanese automakers and first tier suppliers should be able to absorb the decline in production volume by lifting output in the latter half of 2011,” S&P said. 
/ENDS