Monday, 28 March 2011

Japan quake hurts car makers

Global vehicle manufacturers could lose production of up to 600 000 vehicles due to Japan disaster
Published: 2011/03/28 06:34:46 AM

GLOBAL vehicle manufacturers may lose production of 600 000 vehicles by the end of the month as the earthquake in Japan halts assembly lines and work at suppliers including the maker of a paint pigment.

About 320000 vehicles may have been lost worldwide up until Thursday last week, and manufacturing at plants in North America may be affected when parts supplies start running out as soon as early next month, says Michael Robinet, vice-president of IHS Automotive.

"The next surge of shutdowns comes when the pipeline of parts that were already built dries up," Mr Robinet said yesterday.

"The rate of lost production will accelerate once North American plants join in."

Toyota Motors, the world’s largest vehicle maker, said it had lost output of 140000 vehicles, and Honda Motors had lost 46600 cars and trucks and 5000 motorcycles.

Mitsubishi Motors was lowered by 15000. Ford Motor had not lost any output, spokesman Todd Nissen said.

Mazda Motors, which had said its production was reduced by 31000 cars, on Friday suspended US dealer orders for vehicles built at its two Japanese car factories because of supply disruptions caused by this month’s earthquake and tsunami.

Mazda plants in Hiroshima and Hofu had stopped production of new models, spokesman Tim Gilman said.

Mazda made the Mazda2, Mazda3, RX-8, MX-5, CX-7 and CX-9 in Japan, Mr Gilman said. While neither plant was damaged, access to parts and supplies had been crimped in the aftermath of the disaster.

Nissan Motor, General Motors and other vehicle manufactures have not provided details on their possible losses.

Merck KGaA had lost production of a metallic automotive paint pigment called Xirallic because its factory is 45km from the Fukushima Daiichi nuclear plant that was damaged by the earthquake and tsunami, Gangolf Schrimpf, a spokesman for the Darmstadt, Germany-based company, said in a telephone interview.

Merck did not know when company engineers would be able re-enter the Onahama factory, and it would take four to eight weeks to resume output after they had gained access, he said.

"It’s not our fault, and we can’t get back in," Mr Schrimpf said. "It’s bad for us and bad for our customers. It’s sort of at a dead- end currently."

The company is not affiliated to drug maker Merck & Co.

Chrysler was restricting dealers’ orders on 10 vehicle colours because of the potential for a shortage, spokeswoman Katie Hepler said yesterday. The colours included blacks and reds, such as Inferno, she said.

"We currently have an adequate days’ supply to meet existing customer orders and are taking this step as a precautionary measure," Ms Hepler said.

Ford told dealers on Thursday to stop taking orders for vehicles painted in tuxedo black and three shades of red.

Silver was the most popular vehicle colour last year, Pittsburgh-based PPG Industries, the largest supplier of paint for North American vehicle production, said in October last year. Silver, grey and charcoal accounted for 31% of vehicle paint choices in North America, up from 20% in 2008.

Black and white tied for second, with 18% each. Red was next at 11%, said PPG, which makes automotive paint.

"We could certainly see some slowdown in sales," Rebecca Lindland, an analyst for IHS Automotive, said.

"Black and red cars are pretty darn popular."

DuPont, the second-largest automotive-paint supplier in North America, was monitoring the situation and the potential effect on its customers, Gregg Schmidt, a spokesman, said in an e-mailed statement.

The Wilmington, Delaware- based company does use Xirallic, Mr Schmidt said.

A spokesman for PPG declined to comment. Bloomberg

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