Japan's plants hum, but hurdles remain

By Hans Greimel
TOKYO -- Playing a frantic game of catch-up, Japan's automakers are running assembly plants at a pace faster than pre-earthquake schedules in order to boost inventories and recoup sales.

Toyota and Nissan are leading the surge, with output in Japan not only back to normal but exceeding year-ago levels. Mazda and Suzuki have reported their first year-over-year production increases since the March 11 quake, and Honda, Subaru and Mitsubishi are close behind.

But even as the companies return to full domestic output, big hurdles remain.

Some model variants are still in limited production because of lingering shortages of parts, especially microcontrollers. And even with output restored, it could take months for carmakers to rebuild prequake inventory levels, especially at U.S. dealerships.

Suppliers may struggle to keep pace with the surge. And automakers are rejiggering supply chains so they won't get burned again.

They are racing to find multiple sources for parts; tighten control over lower-tier suppliers; buy more parts overseas; and even bolster stockpiles, an abrupt change from Japan's treasured just-in-time approach.

Building inventories
Toyota is among the most aggressive in its supplier overhaul.

"We have instructed them to have a plan that allows them to go back to normal operations within two weeks of a major disaster," Shinichi Sasaki, Toyota Motor Corp.'s executive vice president for global purchasing, told Automotive News.

Toyota's domestic output rose 12 percent in August -- its first year-over-year increase since the earthquake. But it does not expect normal U.S. inventories until March.

Nissan's domestic production actually edged ahead of last year's in May. But not even Nissan says it can make all the car variants it wants. Because of pinched pipelines for some microcontrollers, the small computer chips that control everything from engines to entertainment systems, Nissan does not expect to return to unrestricted production until later this month.

Subaru says its Japan plant will be back to normal by the end of October. But it will take until March for the brand to achieve prequake U.S. inventory levels, especially for Japan-made models such as the Forester SUV and Impreza sedan.

Chips still down
Output of most models at Honda is almost back to normal. But it is still facing shortages of the redesigned Civic in the United States and the Brio small car for Asia. Because those cars were introduced after the quake, Honda couldn't stockpile enough microchips. Civic production should return to normal by the end of this month, and U.S. inventories of the model are expected to be restored by late November.

Nissan spokesman Toshitake Inoshita said: "In terms of raw production numbers, we have more than full production. But we are still waiting on some electronic chips."

Chip maker Renesas Electronics Corp. of Tokyo remains a bottleneck, but that will ease soon. The supplier, which controls about 41 percent of the global market for automotive microcontrollers, returned to prequake output at the end of September, spokeswoman Kyoko Okamoto said. That means a normal flow of chips will start to reach automakers this month.

But Renesas is far from recovered. It recouped prequake output by shifting work from its damaged Naka factory in Japan's quake zone to chip foundries in Singapore and Taiwan. The Naka factory is still limping along at just over half its prequake capacity. Until the factory is fully restored, it may be hard for Renesas to meet increased demand as automakers ramp up.
Masaya Yamashita, Honda Motor Co.'s global purchasing boss, says: "In order to supply to the carmakers, I think Tier 1 suppliers are really struggling to make deliveries to all of us. The parts are reaching us. But the inventory of parts in the chain is pretty tight."

The pinch has Toyota revising its famous low-inventory, just-in-time production system.

Normally, Toyota carries a two-month inventory of Renesas chips, global procurement chief Sasaki says. But it will raise that figure to as high as four months.

"Right now we are recalculating the optimal volume of inventory that is necessary based on our estimate of how long it will take production at our suppliers to resume after a disaster," he said.

Another new norm: paternalistic big-footing of lower-tier suppliers, a practice previously all but unknown.

Take Nippon Chemi-Con Corp., a maker of aluminum foil for electrolytic capacitors for the electrical system. Its factory was wiped out.

Toyota, which is accustomed to working intimately with Tier 1 and 2 suppliers, decided to get active with lower-tier suppliers that had been flying far below the radar. But when Toyota stepped in to help Nippon Chemi-Con, the industry supplier rebuffed Toyota as an interloper, according to an internal Toyota report reviewed by Automotive News.

Only after weeks of arm-twisting by did the supplier acquiesce to Toyota's help in pumping out 700 tons of liquid waste that had flooded the factory.

Paint battle
Toyota also butted heads with pigment maker Merck, which makes a pearl luster pigment called Xirallic. Merck's kilns in Onahama, Japan, were damaged and unable to supply the pigment, which is a component in many paint colors and is used in about 20 percent of Toyota's vehicles.

Merck rejected Toyota's offers of assistance, according to the Toyota report. So Toyota tried making its own pigments -- with mixed results. Of 67 missing colors, Toyota could successfully substitute only 37.

That was enough to tide Toyota over while Merck recovered. But Sasaki said Toyota asked Merck to establish a backup production site in Germany, the supplier's home country. Merck agreed.

Expect all automakers to keep lower-tier suppliers on a tight leash. Toyota, Nissan and Honda are demanding more control over where suppliers get their components.

"The parts and materials that remained the biggest issues for the longest time after the earthquake aren't the parts that we buy, but the parts or materials that the Tier 1 or Tier 2 suppliers buy," says Honda's Yamashita. When possible, he says, "we want to have dual sources."

Bouncing back
Change in monthly production in Japan, vs. 2010

April June Aug.

Toyota
–75% –13% 12%
Nissan
–49% 2% –3%
Honda
–81% –51% –17%

Source (via Carscoop);
http://www.autonews.com/apps/pbcs.dll/article?AID=/20111010/OEM01/310109970/1117

Toyota-Honda U.S. Rebound Brings Call of ‘What Recession?': Cars

Sept. 30 (Bloomberg) -- Toyota Motor Corp. and Honda Motor Co.'s return to full production this month is boosting U.S. auto sales back near the pace reached before Japan's earthquake.

September light-vehicle sales, to be released Oct. 3, probably rose to a 12.8 million seasonally adjusted annual rate, the average estimate of 14 analysts surveyed by Bloomberg. That would be the fastest pace since April, when lost output caused by Japan's tsunami crimped supply of parts and finished cars.

“Recovering inventory levels have helped to bring buyers back into the market,” said Jeff Schuster, executive director of global forecasting at J.D. Power & Associates.

Jesse Toprak, who develops forecasts at TrueCar.com, went so far as to title his latest report “What Recession?” as the auto rebound defies consumer confidence that is near a two-year low.

Toyota has said it expects to reverse monthly U.S. sales declines beginning next month, and Honda is adding overtime shifts at two Ohio plants. Better supply also probably meant incentives rose from the lowest in almost six years.

“The big story this month was better inventory and favorable pricing” for consumers, said Jessica Caldwell, an analyst at Santa Monica, California-based Edmunds.com.

Sales declines at Toyota and Honda contributed to the U.S. auto sales pace slowing from a 13.1 million rate averaged in the year's first four months to as low as 11.6 million in June, according to researcher Autodata Corp.

Toyota Still Recovering
Toyota slipped behind Ford Motor Co. to third in U.S. sales this year through August, which was the first month in the past year that its global production increased. The Toyota City, Japan-based automaker is still recovering and may say sales dropped 15 percent, the average estimate of five analysts surveyed by Bloomberg, leaving it in third again.

“With the launch of the new Camry, October should be even better,” said Paul Atkinson, who operates Toyota dealerships in Bryan and Madisonville, Texas. “We're selling as fast as they're coming off the damn truck.”

Toyota, ramping up production of the redesigned Camry sedan, may say sales dropped 15 percent, the average estimate of five analysts surveyed by Bloomberg. The Toyota City, Japan- based automaker's global production increased for the first time in 12 months in August.

Toyota shares fell 0.5 percent to 2,688 yen in Tokyo at the 3 p.m. close of Tokyo trading. Nissan Motor Co. gained 0.4 percent, while Honda fell 1.4 percent.

Overtime at Honda
Sales may decline 6.1 percent at Honda, the average of five analysts' estimates, after deliveries slid 20 percent or more in each of the past four months. The Tokyo-based automaker is scheduling overtime shifts at its Marysville and East Liberty assembly plants in Ohio, Ron Lietzke, a spokesman, said in a Sept. 28 phone interview.

Honda began the month with 32 days supply of vehicles, from 28 in August, Westlake Village, California-based J.D. Power said in a Sept. 22 statement. The industry standard is about 60 days.

General Motors Co. and Ford are anticipating that demand will keep increasing as the largest U.S. automakers negotiate labor contracts that boost production and add jobs.

GM, which reached a new four-year contract with the United Auto Workers this month, may report a 19 percent increase in September sales, the average of eight analysts' estimates. The Detroit-based automaker and union said the accord adds or retains 6,400 jobs and reopens an assembly plant in Tennessee.

Ford, Chrysler
Ford has discussed with the UAW adding as many as 10,000 union jobs in the U.S., according to three people familiar with the talks. Some of those workers would assemble Fusion sedans, which are currently made in Mexico, said one of the people who asked not to be identified because the negotiations are private.

Deliveries this month may rise 5.9 percent for Dearborn, Michigan-based Ford, the average of eight analysts' estimates.

Sales at Fiat SpA-controlled Chrysler Group LLC, which has extended its UAW contract to Oct. 19, may climb 20 percent, the average of seven analysts' estimates.

GM fell 58 cents, or 2.8 percent, to $20.18 at 4 p.m. in New York Stock Exchange composite trading. Ford dropped 33 cents, or 3.3 percent, to $9.67.

Confidence among U.S. consumers stagnated in September near a two-year low as the share of households saying it was difficult to find a job climbed to the highest level in almost three decades. The Conference Board's sentiment index increased by 0.2 to 45.4 from an August reading that was the lowest since April 2009, the New York-based researcher said Sept. 27.

Auto Industry Shrinks
“The economy is stopped dead in its tracks,” George Magliano, a New York-based economist at IHS Automotive, said in a phone interview. “Considering that, the auto business is showing pretty good strength. The industry is hiring, it's producing more and there's pent-up demand.”
GM and Ford will be adding back only a portion of the jobs they shed during the recession that sent auto sales to a 27-year low of 10.4 million in 2009, according to Autodata Corp.

GM had about 49,000 U.S. hourly employees at the end of 2010, a year after its U.S.-backed bankruptcy. That's down from 111,000 such workers at the end of 2005, the company said in a Sept. 28 conference call with analysts.

Last year, about 962,000 U.S. workers were employed making vehicles and parts, according to the Bureau of Labor Statistics in Washington. That's down 32 percent from 1.41 million in 2005.

The downsizing of the industry, achieved in part by U.S.- backed bankruptcies for GM and Chrysler, meant cutting production capacity. That prevented U.S. automakers from raising output and offsetting industrywide constraints on inventory after the Japan earthquake and tsunami in March, said Alan Baum, an industry consultant at Baum & Associates.

‘Limited Ability'
GM, Ford and Chrysler “had a fairly limited ability to capitalize because there are a lot fewer auto plants and workers than there were four years ago,” said Baum, who is based in West Bloomfield, Michigan. “You can't just add a shift willy- nilly.”

Nissan, whose better supply of parts has buoyed inventory levels above its Japan-based rivals, may say deliveries climbed 18 percent, the average of five analysts' estimates.

Hyundai Motor Co., South Korea's largest automaker, and its affiliate Kia Motors Corp., may combine to sell 20 percent more vehicles than a year earlier, according to the average of three estimates. Both automakers are based in Seoul.

J.D. Power today increased its estimate for the September auto-sales rate to 13 million from 12.9 million.

Industrywide deliveries may rise to 12.7 million cars and light trucks this year, the average of 18 analysts' estimates surveyed by Bloomberg in August. Sales may climb to 13.6 million in 2012, the average of 15 estimates. The U.S. averaged annual sales of 16.8 million vehicles from 2000 to 2007, according to Woodcliff Lake, New Jersey-based Autodata.

The following table shows estimates for car and light-truck sales in the U.S. Estimates for companies are a percentage change from September 2010. Forecasts for the seasonally adjusted annual rate, or SAAR, are in millions of light vehicles.

September had 25 selling days, matching the year-earlier period.*T

GM Ford Chrysler SAAR
Himanshu Patel NA NA NA 12.8
(JPMorgan)
Rod Lache 21% 8.5% 22% 13.0
(Deutsche Bank)
Chris Ceraso 14% 4% 16% 12.6
(Credit Suisse)
Brian Johnson 17% 7% 25% 12.8
(Barclays)
Peter Nesvold 24% 1.6% NA 12.7
(Jefferies)
Patrick Archambault 15% -1.3% 13% 12.4
(Goldman Sachs)
Itay Michaeli NA NA NA 12.9
(Citigroup)
Adam Jonas NA NA NA 12.8
(Morgan Stanley)
George Magliano NA NA NA 12.4
(IHS Automotive)
Jeff Schuster NA NA NA 13.0
(J.D. Power)
Jessica Caldwell 19% 11% 23% 12.9
(Edmunds.com)
Jesse Toprak 21% 8.5% 20% 13.1
(TrueCar.com)
Alan Baum NA NA NA 12.8
(Baum & Associates)
Seth Weber 21% 8% 24% 12.8
(RBC)
Average 19% 5.9% 20% 12.8
*T
--Editors: Bill Koenig, Jamie Butters

Source;
http://news.businessweek.com/article.asp?documentKey=1376-LS9L3G1A1I4H01-31KL3EA80KPOTH5QSRJ96RFGAM

Honda denies nuclear mission for robot

There was a report that Honda was going to outfit ASIMO with a few upgrades to help out in the disaster in Japan;

http://gizmodo.com/5830373/hondas-most-adorable-robot-is-about-to-go-nuclear

TOKYO — Japan's Honda has denied a press report it is hoping to retool its humanoid robot ASIMO to enable it to join emergency work inside the crippled Fukushima Daiichi nuclear power plant.



The Japanese newspaper Asahi Shimbun said in its Friday evening edition that Honda was aiming to upgrade the robot's upper body functions so that it can move its arms as smoothly as a human being.



US Honda spokeswoman Lauren Ebner said the report was "speculation."



"Although Honda hopes that ASIMO will someday be a helper to people, at this point the robot is solely a research and design project," Ebner said in a statement to AFP.



No official at Honda's head office in Tokyo was available for comment on Friday.



The current ASIMO, introduced in 2000 and resembling a small astronaut, stands 130 centimetres (4 feet 3 inches) tall. The bipedal bot can walk, run, carry trays, push carts and shake hands with people.



Asahi said that to work in the debris-strewn nuclear plant, ASIMO would likely be modified and fitted with tyres or caterpillar tracks.



The Fukushima plant has been leaking radiation from its reactors since its cooling systems were knocked out by the March 11 earthquake and tsunami. At some hotspots radiation is high enough to be lethal to humans.



Robots have already been used inside the plant to take video footage, including the US-made PackBot and Japanese-made Quince crawler robots.



Source;

http://www.google.com/hostednews/afp/article/ALeqM5g7m9qLNugC96cUAu4BGNJPVA8Dxg?docId=CNG.1cc437d7d61fc59f3394a87a1a28abbb.171

UPDATE: Honda Pres: Yen Remains Big Concern As Seeks To Restore Ops

By Yoshio Takahashi
Of DOW JONES NEWSWIRES

TOKYO (Dow Jones)--Honda Motor Co.'s (7267.TO) chief executive voiced concern about the yen's strength Thursday, noting its current position could offset the Japanese auto maker's attempt to recover after the March 11 earthquake and tsunami.

"My feeling is that (the business) situation is tough, especially foreign exchange. I hope that the (unfavorable yen level) will change," Takanobu Ito, president and chief executive of the car maker, said at a press conference for the launch of the auto maker's Fit Shuttle hybrid wagon.

Earlier this week Honda said that it expects its net profit for the current fiscal year through March to drop 63% on the back of the yen's strength and reduced output resulting from a parts shortage in the wake of the disaster.

Honda expects a scarcity of some key parts from suppliers stricken by the disaster to reduce its global sales by 6% to 3.3 million vehicles this fiscal year.

In a bid to push sales during harsh times, Honda rolled out the Fit Shuttle hybrid wagon in Japan three month behind the initial schedule due to the earthquake.

The new hybrid with a starting price of Y1.81 million was developed based on its Fit company hybrid and can run 30 kilometers on a liter of gasoline.

This price is lower than the lowest price of the Prius Alpha minivan hybrid launched last month by Toyota of Y2.35 million.

Toyota's new hybrid was also introduced in Japan with a delay due to the disaster.

Honda said it has received orders for 7,000 Fit Shuttle hybrids, well above the model's monthly sales target of 4,000 units.

But Toyota sees much stronger demand for its newest hybrid, saying Tuesday that it has received 52,000 orders in Japan for the new minivan version of the Prius hybrid one month after its launch. The number far outstrips the company's 3,000 monthly sales target for the Prius Alpha.

Source;
http://online.wsj.com/article/BT-CO-20110616-702125.html

Post-quake Honda says it now has lots of Fits, Insights for dealers

Honda offered a terrific sign this week that it is finally getting back on its feet in the U.S. after the March earthquake and tsunami that drastically slashed production.

It is now telling dealers that they can resume ordering two of the most in-demand models -- the small Honda Fit and the hybrid Insight, Automotive News reports.

The two models, both made in Japan, have been among the most in-demand as gas rose to an average of nearly $4 a gallon. The Fit is the smallest car that Honda sells in the U.S. and comes recommended by Consumer Reports. The Insight is the brand's underrated hybrid, a competitor to Toyota's Prius.

"Honda's manufacturing operations in Japan are returning to nearly normalized levels by the end of summer," said John Mendel, executive vice president of Honda's U.S. sales operation in a memo to Honda dealers. Adding back Fit and Insight "represents a major improvement from the recovery timetable we provided you last month."

Honda stopped orders on the models after the earthquake. Honda didn't incur major damange to its factories in Japan, but it has been badly impacted by the shortage of parts that has hampered other automakers, including those in the U.S.

In fact, Mendel is downright bullish. Noting that other models like the Pilot SUV, Odyssey minivan and CR-V small crossover are coming back to normal production levels, he implored dealers, "it is imperative that you keep your foot on the sales pedal."

It won't be easy: Sales fell 22% in May compared with a year ago, the News notes.

Source;
http://content.usatoday.com/communities/driveon/post/2011/06/post-quake-honda-says-now-lots-of-fits-insights-for-dealers/1

Honda plans to bring its Japanese assembly plants back to normal output by summer

Honda Motor Co. is seeking to recover from the Japan disaster months earlier than forecasted. It expects that its assembly plants in Japan will be able to resume normal production by summer. Spokesman Keitaro Yamamoto said Honda’s factories in Sayama and Suzuka factories, the car’s only assembly plants in Japan, are expected to get back to pre-earthquake production levels by August. Honda had previously announced that global production will be restored by the end of the year. Honda had been significantly affected by the March 11 earthquake and tsunami in Japan that had resulted to disruptions in the supply chain and to idled plants.

But it’s likely that the global operations will normalize earlier with the progress in the country’s recovery, according to Autonews. Honda anticipates that the r&d center’s engineers, who were out of work after the disaster struck, will go back to the facility by the middle of June. The earthquake claimed one death and led to several injuries when it caused the ceiling at Honda’s body design facility to crash down. Last March, Honda put a thousand of its r&d workers (about 10% of the center’s total workforce) to continue their work at its other buildings in the site or at its other facilities in Japan while repairs are ongoing.

Yamamoto said that suppliers are exceeding expectations and are restoring output earlier. That is why automakers are also able to resume normal production earlier too. Honda’s improved outlook was revealed only days after it said that U.S. production will go back to normal this August for its entire lineup except the recently redesigned Civic. Honda has announced that a second shift will be put up later in 2011 at its Civic plant in Indiana to help make up for the production losses.

Source;
http://www.4wheelsnews.com/honda-plans-to-bring-its-japanese-assembly-plants-back-to-normal-output-by/

Honda Gives Assurances to U.S. Dealers

By MIKE RAMSEY
DETROIT—Honda Motor Co. told its U.S. dealers Friday that July vehicle deliveries would increase by 11% from June levels and accelerate in August as the auto maker ramps up production after the March 11 earthquake in Japan.

American Honda Executive Vice President John Mendel said in a memo that its sales continued to "run at a relatively soft pace" despite what the company considers decent inventory levels, albeit lower than year-earlier levels.

"Many of you have indicated that it is due in large part to concerns for inventory going forward," Mr. Mendel said.

Honda follows Nissan Motor Co. in efforts to encourage its dealers to continue driving deals to gain customers despite a murky outlook for vehicle inventories this summer. Both auto makers and Toyota Motor Corp. had to stop production in Japan for several weeks following the earthquake, and all continue to face shortages of electronic components, LCD screens and rubber.

U.S. sales for Honda rose 10% last month compared to 18% for the overall industry.

"It's interesting to note that although our total inventory is down versus May 2010, we have more CR-Vs, Pilots and Fits in dealer inventory now than we did a year ago," Mr. Mendel said.

"With this level of inventory, coupled with competitive incentives focused on vehicles with sufficient availability, you all need to continue to push hard on the sales front."

Last week, Nissan asked dealers to be more aggressive and go after Toyota and Honda, which it deemed vulnerable.

Source;
http://online.wsj.com/article/SB10001424052748704816604576335061787279604.html?mod=googlenews_wsj

Honda says parts supply recovery picking up speed

May 17 (Reuters) - Honda Motor is seeing a speeding up in the recovery of parts supplies, which will be key to bringing forward its timing for a return to normal production after a March earthquake and tsunami in northeastern Japan disrupted supply chains, the automaker's chief financial officer said on Tuesday.

Honda Chief Financial Officer Fumihiko Ike also told a small group of reporters that the company plans to announce its earnings forecast for the current fiscal year before its shareholders' meeting, which is scheduled for June 23. (Reporting by Kentaro Sugiyama; Writing by Junko Fujita; Editing by Edmund Klamann)

Source;
http://www.reuters.com/article/2011/05/17/honda-production-idUST9E7GA01I20110517

Japan nuclear plant shutdown adds new risk to economy

By Stanley White and Chang-Ran Kim
TOKYO Mon May 9, 2011 1:27pm BST

(Reuters) - The surprise closure of another Japanese nuclear plant, this time at the power supplier to the heart of the auto industry, threatens to dampen consumer sentiment and will provide car makers with yet another reason to produce fewer cars in Japan.

Chubu Electric Power (9502.T) agreed on Monday to close its Hamaoka plant in central Japan, raising concerns over the steady supply of power to its region, which is home to Toyota Motor Corp (7203.T) and other major manufacturers.

The shutdown was requested by the government, which singled out Hamaoka as particularly vulnerable to a major earthquake and tsunami, after the 9.0-magnitude quake on March 11 triggered a nuclear crisis in the northeast.

Output disruptions may not be large enough to delay the economic recovery nationwide because Chubu is taking steps to meet peak summer demand by boosting thermal energy and securing electricity from another utility in western Japan.

But in the longer run the lack of clarity about how the government's energy policy might change following the March 11 disaster could tempt Japanese manufacturers to move more production overseas and discourage private consumption.

"We can rely on thermal power in the short term, but this raises costs and emissions," said Yasuo Yamamoto, senior economist at Mizuho Research Institute.

"In the future, we're not sure what the government wants to do. The longer that uncertainty about the power supply continues, the more companies will start thinking about manufacturing overseas."

The Hamaoka plant, located about 200 km (120 miles) southwest of Tokyo, accounts for about 15 percent of its electricity output. Chubu in turn provides power to half of the 18 plants that make Toyota's vehicles in Japan, and all four of Suzuki Motor Corp's (7269.T) domestic car and motorcycle factories.

The coverage area also includes other auto plants including those of Honda Motor Co (7267.T) and Mitsubishi Motors Corp (7211.T), but Toyota is most vulnerable given its heavy ratio of cars made domestically.

Toyota and Honda have been forced to operate at about half the levels planned before March 11 due to the shortage of components. They have forecast a return to normal production levels by the end of this year.

The Chubu region also includes a concentration of manufacturers in the flat panel display and semiconductor industries, such as Sharp Corp's (6753.T) Kameyama LCD factory and Toshiba Corp's (6502.T) Yokkaichi semiconductor plant.

Toyota, Suzuki and other car makers said they had no comment on how they would cope before Chubu Electric explains how it plans to make up for the power shortfall.

Replacing nuclear power with that produced by conventional thermal plants could increase electricity costs, but those make up only a small portion of automakers' costs, argues Nomura Securities auto analyst Masataka Kunugimoto.

What matters more, analysts say, is doubts about reliability of power supplies that could give automakers another reason -- in addition to a strong yen and cheaper labor abroad-- to shrink production volumes in Japan.

"This raises a question of how you're going to split your domestic and overseas production," said Koji Endo, senior analyst at Advanced Research Japan.

Toyota and Nissan have publicly committed to a minimum level of domestic production to keep Japan's tradition of manufacturing alive, but questions surrounding energy policy could force a rethink, Endo said.

The shutdown's impact on households could be more direct and immediate. Power cuts or a rise in electricity bills could force households served by Chubu Electric to save more energy or spend less on everything else, damaging sentiment already depressed by radiation leaks from the Fukushima plant in the tsunami-ravaged northeast.

Private consumption accounts for more than 50 percent of gross domestic product and Japan's limping economy badly needs consumer spending to hold up.

"Chubu Electric is likely to come up with a campaign to save power, which could depress private consumption," said Takuji Okubo, chief economist at Societe Generale Securities.

"Companies should be able to cope, but weak consumer sentiment could become a national phenomenon."

Source;
http://www.autospies.com/news/Closure-Of-Another-Power-Plant-May-Force-Auto-Production-Out-Of-Japan-63740/

Honda to Limit Orders of Japan-Built Cars, including the Civic

Due to the Japan earthquake and tsunami disaster, shortage of new vehicles possible until end of year
BY: Kristin Craik

Honda announced today the company’s overall production volume will remain significantly reduced throughout the summer months. Although most of Honda’s vehicles are made in North America, overall production is expected to normalize sometime near the end of 2011.

This move comes as a reaction to service interruptions at Honda’s Japanese plants, which were severely affected by the Japan earthquake and tsunami disaster. This is detrimental to vehicle production because of a few critical parts supplied from Japan. Most of Honda’s Japan-based parts suppliers have resumed production and Honda is working hard with a few suppliers that are not yet back to production capacity.

Honda has a few popular car models affected by this situation. The new 2012 Honda Civic will have significantly reduced levels throughout the summer months. The fall launch of the 2012 CR-V will be delayed at least by one month. Only a limited amount of Japan-built vehicles will be available for the remainder of the year. Those models speculated to have limited availability are the Honda Fit, CR-Z, Civic Hybrid, Acura TSX, Acura TSX Wagon, and the Acura TSX RL.

Additionally, due to a shortage in supply of Japan-sourced paint pigment, certain colors of vehicles will also be in short supply.

Source;
http://www.businessreviewcanada.ca/sectors/automotive/honda-limit-orders-japan-built-cars-including-civic

WSJ: Honda Motor:Expect Domestic Plants To Return To Normal By Year-End

TOKYO (Dow Jones)--Honda Motor Co. (7267.TO) said Monday that it expects its domestic auto plants to return to production levels planned before the March 11 earthquake by the end of the year.

The car maker's domestic plants will remain at half the initially planned volume until the end of June, though production levels after July are still unclear and will depend on parts supplies. The outlook for overseas factories also remains uncertain, Honda said.

Plants in North America, the U.K., Turkey and the Philippines are operating at 50% of their initially planned levels, while the company has also reduced output volumes at factories in China and Thailand, the car maker said.

The quake and tsunami disrupted the company's parts supply chain and a parts shortage has kept production at reduced levels.

Toyota Motor Corp. (7203.TO) said last Friday that it doesn't expect its domestic and overseas factories to be back to normal until November at the earliest.

Source;
http://online.wsj.com/article/BT-CO-20110424-702114.html

Honda altering production schedule in Alliston

Reducation expected to continue until May 6
By Marg. Bruineman, the Barrie Examiner

Reduced daily production levels at Honda Canada's Alliston facility has been extended as a result of a parts shortage from the earthquake-ravaged Japan.

"Production adjustments continue until May 6, although adjustments vary," said Honda's Lori Van Valkenburg in Alliston. "All associates have the opportunity to work their entire shift and work is being provided for them."

They also have the option of taking vacation time or time without no pay with no penalty.
On Monday, she said, associates worked six hours in production in the weld department in Plant 2.

But the expectations are that everything will return to normal after that.

"We anticipate that additional production adjustments will continue after that date," the company announced in a press statement.

The car builder has reduced the number of cars it builds as a result of last month's devastating earthquake and tsunami in Japan. The natural disaster, which has claimed about 14,000 lives, impacted both the car builder and its suppliers in Japan.

Most of the cars supplied to the North American market are built in North America. And a majority of the parts are sourced here.

About 4,200 people work at Honda Canada's Alliston facility, which has two car-building plants and an engine plant.

The bulk of production are Honda Civics (sedan, coupe, and Si sedan & coupe) along with the Acura MDX, Acura ZDX, Acura CSX.

But some of the parts are shipped in from Japan, where several companies are struggling to get back to production. As a result, there's limited supply of parts available for car building in Alliston.

Honda's car building plants in Japan all resumed limited production last week, operating at about 50% capacity.

Source;
http://www.thebarrieexaminer.com/ArticleDisplay.aspx?e=3080274

Honda Canada Ordering Delays

Well, the fallout from Japan's disaster is official, incoming units have been delayed indefinitely. We normally have about 9-12 pages of incoming units and we are now down to about 2 pages of stock.

Incoming 2012 Honda Civic's have been taken right out, so I am not sure if Honda will be delaying the launch date of April 22nd, 2011, although I do know that some dealerships in the US have

CRV's are about the only thing that I think dealerships with have in adequate stock.

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Honda Canada

Nissan, Honda Better Positioned Than Toyota After Japan Quake

Moody’s says that this month’s triple disaster of earthquake, tsunami, and nuclear crisis in Japan will not result in wholesale rating changes for Japanese automakers, but its aftermath will weaken the issuers’ operations and financial performance at least through the first half of fiscal-year 2011, ending next March.

Tadashi Usui, the lead author of the report and a Moody’s vice president in Tokyo, says, “To a large extent, the financial health of our rated Japanese automakers before the disaster determines their vulnerability: Toyota (TM) and Yamaha were less well positioned in their ratings and thus are more vulnerable, Nissan (NSANY.PK) and Honda (HMC) are better positioned, and Isuzu is in the middle of the pack.”

Usui adds, “For example, Toyota had been trying to recover after widespread product recalls in 2010; whereas, Nissan’s performance had been improving and was on review for possible upgrade.”

Usui says, “None of these companies have assembly plants that experienced lasting direct damage from the earthquake or tsunami.” He adds, “However, the indirect effects of power shortages and rolling-black outs, disruptions to supply chains, and staffing issues represent a more serious problem.”

A contributor to the report, Michael Mulvaney, a managing director for Moody’s in New York, adds adds, “Problems at geographically dispersed second- and third-tier suppliers may be severe, and for critical parts, the added costs of finding alternative sources of supply could shave 1% to 2% from automakers’ margins.”

Mulvaney says, “We expect Japanese automakers’ full-year revenues for the coming fiscal year to at best show low single-digit growth as overseas markets help to offset weakness in the domestic Japanese market in the first half of the year.”

In a separate report Moody’s sees no material threat tothe ratings of Europe-based automotive suppliers, which have limited direct exposure to the consequences of the disaster:

However, we believe that they will feel ripple effects in the global supply chain as original equipment manufacturers (OEMs) reduce output in Europe and North America. Although OEMs and suppliers worldwide are exploring alternatives to supply shortages caused in Japan, we believe it will take some time to realign the supply chain where necessary.

Once this has happened, we expect at least some of the lost production volumes to be recovered. We expect the disaster to negatively impact revenue and earnings, primarily in Q2 2011. In addition, halts in OEM production might impact working capital consumption. However, we estimate that the impact on the credit metrics of Europe-based automotive suppliers will only be temporary.

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http://seekingalpha.com/article/261141-nissan-honda-better-positioned-than-toyota-after-japan-quake

Honda to cut output at U.S., Canadian auto plants

DETROIT (Reuters) - Honda Motor Co (7267.T: Quote) will cut production at its U.S. and Canadian automotive plants starting Wednesday due to disruptions in the supply of auto parts after the Japanese earthquake more than two weeks ago. The temporary changes to the production schedule will vary plant by plant based on the availability of certain parts, Honda spokesman Jeffrey Smith said. He declined to detail the changes in production at individual plants. The automaker operates plants in Canada and three states in the United States. Honda relies on North American suppliers for more than 80 percent of the parts it uses to build vehicles in North America. Honda has suspended production at its two plants in Japan until at least April 3. Smith said most of the company's Japan-based parts suppliers have resumed production or are ready to start. "This is a very fluid situation," Smith said. He added: "We are working with a few suppliers who have yet to resume production to reestablish operations and at the same time, we are evaluating additional sources for some parts." The March 11 earthquake, tsunami and nuclear crisis in northern Japan have left the global auto industry struggling to manage a ripple effect across its production and supply base. Earlier Tuesday, Toyota Motor Corp (TM.N: Quote)(7203.T: Quote) told its dealers to curtail orders of certain replacement parts to ensure an adequate supply. Source; http://ca.reuters.com/article/businessNews/idCATRE72S74M20110329

The Most Devastating Footage of Japans Tsunami

Honda Suspends Dealer Orders on Japan-Built Cars

After Mazda announced last week that it would halt orders on U.S. deliveries of all Japan-made cars, Honda has now decided to follow a similar action. Informing dealers that they can no longer order Japan-build cars, retailers will be forced to move only what is on their lot until the Japanese supply chain can be mended.

Vehicles affected by the order include hybrid models like the CR-Z, Insight and Civic Hybrid, as well as some CR-V models (many of which are also build in North America). The Acura luxury division has also been affected, with the TSX and RL also made in Japan.

With current dealer inventories, this shouldn’t pose a product shortage unless the delay is lengthy.

Other Japanese automakers, including Mitsubishi, Nissan and Toyota, have yet to announce any such supply chain issues.

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http://www.autoguide.com/auto-news/2011/03/honda-suspends-dealer-orders-on-japan-built-cars.html

Report: Japan will affect all automakers

Alisa Priddle / The Detroit News

Every major automaker will be affected by the disaster in Japan by mid-to-late April, according to a report released today by automotive forecasters IHS Global Insight of Northville.
"It is not a matter of if, but when," said Michael Robinet, director of Automotive Forecast, in an analysis of the impact on the auto industry of the earthquake and subsequent tsunami in northern Japan. The damage halted domestic vehicle production and affected the supply chain, which is causing disruptions at plants around the world that rely on Japanese-sourced parts.

The IHS analysis concluded that light vehicle output in Japan is expected to be impacted by about 335,000 vehicles by Friday and that figure could be in the 450,000 range by the end of March. That is based on a loss of about 37,000 cars and trucks a day if all Japanese assembly plants are affected.

Toyota Motor Corp. and Nissan Motor Co. are gingerly resuming production of components for overseas plants and hope to restart vehicle assembly plans in Japan later this week.

Some of the most fuel-efficient vehicles offered by Japanese automakers are only built in Japan. As supplies diminish of vehicles such as the Toyota Prius hybrid, average transaction prices for some models are starting to creep up and incentives are likely to evaporate, said Aaron Bragman, IHS automotive analyst, in a separate report also released today.

TrueCar.com says prices of Japanese models in the U.S. are rising already, with the Prius up $169 per vehicle, on average, in the past week in response to the supply crunch, Bragman notes.

"If the supply of imported Japanese fuel-efficient vehicles cannot be restored quickly, an opportunity may arise for well-placed competitors to start stealing U.S. market share from Japanese automakers," Bragman said.

Among the well-situated is Ford Motor Co., which has made fuel-efficiency a priority and has a number of new models that get 40 miles per gallon. General Motors Co. also has new small vehicles as well as the Chevrolet Volt plug-in hybrid. Hyundai Motor Co. also has a lineup of strong contenders.

"The initial estimates are that this could be a protracted shutdown of the Japanese industry," Bragman said. In addition to issues with vehicle production and parts supply, there are rolling blackouts because of damage to the electric power grid and a nuclear disaster in addition to other infrastructure damage as well as port and shipping issues and the loss of workers.

Robinet said it could take seven weeks of full production, with overtime, at a facility to make up for one week of lost production.

But competitors will only be able to fill any voids created by a shortage of Japanese models if they have the parts to keep their own assembly lines running as well.

So far, lost volume outside Japan is only about 10,000 vehicles, according to Robinet. That includes General Motors Co.'s truck plant in Shreveport, La., which suspended work because of parts shortages.

The Japanese-made components most affected include semi-conductors, integrated circuits, sensors and LCD displays, but IHS said shortages also may be felt in resins and synthetic rubber in the next few weeks. And the quake zone is home to powertrain parts such as gears and clutch components. Specialty materials such as silicon and certain types of glass and metals could also run short, Robinet forecasts.

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http://www.detnews.com/article/20110321/AUTO01/103210409/1020/Report--Japan-will-affect-all-automakers

Consumer Reports: Mythbuster: Can cars imported from Japan be radioactive?

As Japan struggles to emerge from the recent earthquake and subsequent tsunami, and faces further potential disaster from the damaged Fukushima Daiichi nuclear power complex, the auto industry is wrestling with how to cope with the enormous logistic challenges these tragedies have created. Japanese automakers and their suppliers have suspended production, and it may be months before things are fully back up to speed. As the world waits to see what happens next, from when rebuilding the ravaged nation can begin to how its recovery could impact markets, some consumers have pondered, are there risks from cars imported from Japan being radioactive?

In a word, no.

The vast majority of factories are located well outside the evacuation range surrounding the Fukushima Daiichi complex. Automakers report they are taking precautions to ensure their factories, components, and staff are protected. Likewise, they will ensure that vehicles meet safe levels for radiation before distributing.

"Toyota will take any necessary steps to ensure the cars we deliver to customers are safe in every way," said Javier Moreno of Toyota Communications. He stated that the majority of Toyota Motor Corporation's operations in Japan are located about 240 miles southwest of the nuclear power plant and no unusual radiation activity has been detected.

We spoke with several companies, all of which have been working to protect their workers and consumers, while rebuilding their businesses. The sentiments expressed by the automakers were similar, though clearly some were harder hit than others.

"We are evaluating the situation very carefully, of course, safety is our number one concern," said Jeffrey Smith of Honda Corporate affairs. He added that the nearest port to the impacted area that Honda uses is about 125 miles away. Honda had 17 employees injured in the Tochigi area during the earthquake, plus an associate killed at an R&D facility.

Beyond the safety measures in place in Japan, consumers are further protected by U.S. Customs and Border Protection (CBP), an agency focused on preventing terrorists and weapons from entering the United States. Among its tools, the CBP uses sensitive, large-scale Radiation Portal Monitors (RPM) to scan all maritime cargo and mail arriving from Japan. In addition, agents use a wide range of technologies, including radiation isotope identifiers, to scan people, vehicles, and cargo containers. The radiation isotope identifiers are hand-held devices that can detect gamma and neutron emissions from radioactive sources, including nuclear, medical, and industrial isotopes. With hundreds of such devices in the field, any car or other product carrying an unsafe level of radioactivity would be discovered and halted at the more than 140 Border Patrol stations and more than 150 ports of entry.

As one would expect, the CBP tells us that they are monitoring developments in Japan carefully and specifically assessing the potential for radiological contamination associated with the ongoing impact of the earthquake and tsunami to Japan's nuclear facilities.

There are many valid concerns surrounding the crisis in Japan, including the human toll, cultural impact, and market forces, but radioactive consumer goods is not one of them.

Learn what you can do to aid Japan (via CNN), and donate to the American Red Cross.

—Jim Travers and Jeff Bartlett

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http://blogs.consumerreports.org/cars/2011/03/mythbuster-can-cars-imported-from-japan-be-radioactive.html

Driver films moment his car is engulfed by tsunami