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Automakers May Lose 600,000 Vehicles As Quake Hits Parts, Paint

March 26, 2011
3 min to read


DETROIT - Global automakers 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 German maker of a key paint pigment.


About 320,000 vehicles may have been lost worldwide as of March 24, and global manufacturing may be affected when parts supplies start running out as soon as early April, said Michael Robinet, vice president of Lexington, Massachusetts,-based IHS Automotive.


"The next surge of shutdowns comes when the pipeline of parts that were already built dries up," Robinet said in a telephone interview.


Merck KGaA has lost production of a metallic automotive paint pigment called Xirallic because its factory is 28 miles from the Fukushima Dai-Ichi 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 doesn't know when company engineers will be able re-enter the Onahama factory, and it will take four to eight weeks to resume output after they gain access, he said. "It's not our fault, and we can't get back in," Schrimpf said. "It's bad for us and bad for our customers. It's sort of at a dead-end currently." The company isn't affiliated with Merck & Co., the drugmaker based in Whitehouse Station, New Jersey, reported Automotive News Europe.


Chrysler is restricting U.S. dealers' orders on 10 vehicle colors because of the potential for a shortage, Katie Hepler, a spokeswoman, said yesterday in an e-mail. The colors include blacks, such as Blackberry Pearl, 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," Hepler said.


Ford told dealers March 24 to stop taking orders for vehicles painted in tuxedo black and three red shades. Silver was the most popular automobile color last year, Pittsburgh-based PPG Industries Inc., said in October. Silver, gray and charcoal accounted for 31 percent of vehicle-paint choices in North America, up from 20 percent in 2008. Black and white tied for second, with 18 percent each. Red was next at 11 percent, said PPG, which makes auto paint.


"We could certainly see some slowdown in sales," said Rebecca Lindland, an analyst for IHS Automotive. "Black and red cars are pretty darn popular."


DuPont Co. is monitoring the situation and the potential impact to its customers, Gregg Schmidt, a spokesman, said in an e-mailed statement. The Wilmington, Delaware,-based company does use Xirallic, Schmidt said. Mike Millar, a spokesman for PPG, declined to comment.


GM idled two compact-car plants in Europe and a pickup factory in Shreveport, Louisiana, amid parts shortages. Toyota Motor Corp., the world's largest automaker, said it has lost output of 140,000 vehicles, and Honda Motor Co. has lost 46,600 cars and trucks and 5,000 motorcycles. Mitsubishi Motors Corp.'s was lowered by 15,000.


Ford Motor Co. hasn't lost any output, said Todd Nissen, a spokesman. Mazda Motor Corp., which had said its production was reduced by 31,000 cars, Friday suspended U.S. 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 have stopped production of new models, said Tim Gilman, a spokesman. Mazda makes the Mazda2, Mazda3, RX-8, MX-5, CX-7 and CX-9 in Japan, he said. While neither plant was damaged, access to parts and supplies has been crimped in the aftermath of the disaster, he said.


Nissan Motor Co., General Motors Co. and other companies haven't provided details on their possible losses.


U.S. automakers' plants may experience sporadic shutdowns because they get so many parts from Japan, said Brian Johnson, an analyst with Barclays Capital in Chicago. Automakers who buy certain parts from one manufacturer may start to look to diversify their supply bases with different companies or with plants in multiple regions, Johnson said.





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