Japan Earthquake Disrupts Global Automotive Industry

The massive earthquake that struck Japan in March 2011 has crippled the country's auto industry, throwing production lines out of gear and causing widespread shortages of critical components. Major automakers such as Toyota, Honda, and Nissan have suspended production in Japan, while others, like General Motors, have halted production at facilities in the United States and Europe. The global automotive industry is bracing for a prolonged disruption, with estimates suggesting it may take months for production to return to normal levels.

Key Takeaways:

• Toyota has suspended vehicle production at its 11 plants in Japan since March 14, resulting in a loss of about 140,000 vehicles.
• Honda has ceased production at six plants in Japan and extended closures at two car-assembling plants until April 3.
• Nissan has suspended production at 6 plants until March 20, but has resumed production of its popular Leaf electric cars.
• General Motors Co. has halted production at an engine plant in Buffalo, New York, and has temporarily laid off 59 workers.
• European automakers are yet to feel the full impact of the earthquake, but are expected to see production returns to normal levels as local supplies of vital auto parts dry up.
• Volkswagen has reduced work shifts at its main plant in Wolfsburg, while PSA Peugeot Citroen is expected to fall by as much as 60% due to a shortage of diesel engine.
• BMW and Daimler AG are struggling with tight availability of parts, and have been operating plants at high capacity levels to meet orders on time.
• Robert Bosch GmbH and Continental AG are likely to face supply shortfalls in the coming weeks, while Volvo cars (owned by China's Zhejiang Geely Holding Group Co.) sources about 10% of components from as many as 30 suppliers in Japan.

Statistics:

• 40 auto parts manufacturers in Japan whose production has been jeopardized due to plant outages and power shortages. (Source: Japan Quake Ravaging Auto?)
• 13% of worldwide automobile production comes from Japan. (Source: Japan Quake Ravaging Auto?)
• 140,000 vehicles: The number of vehicles lost by Toyota due to suspended production in Japan. (Source: Toyota suspends vehicle production)
• 6 plants: Number of Nissan plants suspended until March 20. (Source: Nissan suspends production)
• 59: The number of General Motors Co. employees laid off temporarily due to production halt. (Source: GM halts production at engine plant)
• 60%: Expected reduction in PSA Peugeot Citroen's production due to a shortage of diesel engine. (Source: PSA Peugeot Citroen)
• 10%: The percentage of components sourced by Volvo cars from as many as 30 suppliers in Japan. (Source: Volvo cars)

Sources:

• "Japan Quake Ravaging Auto?" - Zacks.com Analyst Blog
• "Toyota suspends vehicle production" - Toyota Motor Corp.
• "Nissan suspends production" - Nissan Motor Co.
• "GM halts production at engine plant" - General Motors Co.
• "PSA Peugeot Citroen" - PSA Peugeot Citroen
• "Volvo cars" - Volvo cars
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