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Toyota Output Loss May Top 40,000 Vehicles Amid Power Shortage

March 14, 2011
5 min to read


Toyota Motor Corp., the world’s largest carmaker, may lose output of at least 40,000 vehicles after Japan’s strongest earthquake damaged factories and crippled nuclear power plants, causing electricity shortages.


Toyota closed 12 plants in the nation through tomorrow, Shiori Hashimoto, a spokeswoman for the company, said by phone yesterday. The manufacturer’s profit will be cut by 6 billion yen ($72 million) for each day of lost operations in Japan, while Nissan Motor Co. and Honda Motor Co. may each lose 2 billion yen a day, Goldman Sachs Group Inc. estimated, reported Bloomberg.

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Sony Corp. and Toshiba Corp. also shut plants following the March 11 earthquake and tsunami, which police said may have killed more than 10,000 people. The disaster may trim 0.3 percent from Japan’s economy as power outages cut industrial production, Nomura Holdings Inc. estimated in a report.


“Not only is the struck region one of our production bases, those directly hit and vastly affected include our dealers, suppliers and numerous other partners,” Toyota President Akio Toyoda said in a statement on the Toyota City, Japan-based company’s website.


Nissan, Honda


Nissan, Japan’s second-largest carmaker, suspended operations at four plants until tomorrow and at two other plants until March 18, the Yokohama-based company said yesterday in a statement.


The automaker earlier said 2,300 new vehicles were damaged by tsunami surges in the wake of the 9.0-magnitude earthquake, the strongest ever recorded in Japan. Nissan doesn’t have an estimate of how much production may be lost, said Yuichi Nakagawa, a spokesman for the company.

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Honda, the nation’s third-largest carmaker, will halt output through March 20, reducing production by an estimated 16,600 cars and trucks and 2,000 two-wheelers, Tomoko Takamori, a spokeswoman for the Tokyo-based company, said yesterday.


Tokyo Electric Power Co., battling a possible meltdown at a nuclear reactor 220 kilometers (135 miles) north of Tokyo, planned rolling blackouts to conserve power. Millions of people remained without electricity or water as Japan sought aid from the United Nations atomic agency.


‘Panic Selling’


“This earthquake affected a wide area, and it’s likely that the economic impact will exceed the 20 trillion yen in damage sustained during the Kobe earthquake” of 1995, Economic and Fiscal Policy Minister Kaoru Yosano said yesterday.


Toyota fell 4.2 percent to 3,170 yen as of 9:39 a.m. in Tokyo trading, extending its two-day drop to 12 percent. Japan’s benchmark Nikkei 225 Stock Average declined 5.6 percent after plunging 6.2 percent yesterday. Nissan slid 2.9 percent, and Honda lost 3.3 percent.

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Daihatsu Motor Co., 51 percent owned by Toyota, may lose production of 9,600 units as it closes factories through tomorrow, Fumihiko Kondo, a spokesman for the Osaka-based carmaker, said yesterday.


Mitsubishi Motors Corp. planned to resume production at its three Japan factories tomorrow after a two-day halt, Kai Inada, a spokesman for the Tokyo-based carmaker, said today.


“We don’t know how many cars we are going to lose” from the stoppage, said Yuki Murata, a company spokesman. Domestic production totaled 660,104 vehicles in 2010, he said.


Mazda Shortage


Mazda Motor Corp. will extend a production halt at four Japan plants until at least tomorrow night due to a parts shortage, Ken Haruki, a spokesman for the Hiroshima-based carmaker, said by phone yesterday. The company isn’t disclosing how much output it will lose, he said.

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Hino Motors Ltd. said it planned a stoppage until at least tomorrow, and Hiromichi Suwa, a spokesman, said the company was trying to calculate the potential loss. Rival truckmaker Isuzu Motors Ltd. said it would stop output at its two Japan plants until March 18.


Japan’s automakers may be able to make up for lost output by using excess production capacity at unaffected plants and running assembly lines on overtime and during holidays, Nomura analyst Jiyun Konomi said in a March 13 report.


“Capacity utilization at Japanese automakers’ plants in Japan is low,” Konomi wrote. “There does not appear to have been major damage to building or machinery and equipment” at Toyota and Nissan’s factories in the affected areas, he wrote.


Sony Damages


The main risk to Japan’s manufacturing comes from the earthquake’s impact on infrastructure, rather than from direct damage to factories, Bhavtosh Vajpayee, head of technology research at CLSA Asia-Pacific Markets in Hong Kong, said in a March 13 report. The quake may trigger a supply shortage for electronic components including batteries and memory chips, Vajpayee said in the report.

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“Closure of ports, damage to roads and electric power outages can do serious damage to the tech supply chain,” he wrote, adding that Japan is “critical” to the global supply in several electronics sectors.


Japan makes 44 percent of the world’s audiovisual equipment, 40 percent of electronic components, 19 percent of semiconductors and about 20 percent of all technology products, Vajpayee wrote.


Sony, Japan’s biggest exporter of consumer electronics, halted operations at 10 factories and two research centers yesterday because of power outages and damages, said Mami Imada, a spokeswoman for the Tokyo-based company.


Toshiba, Canon


The Tokyo-based company won’t disclose production capacity of the factories that were closed, said Shinji Obana, a Sony spokesman. The company’s shares fell 5.2 percent in Tokyo trading as of 9:41 a.m.

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Toshiba, which makes products ranging from memory chips to nuclear power plants, halted five factories due to power outages and closed one plant because of damage from the earthquake, the Tokyo-based manufacturer said yesterday.


Toshiba makes between 25 percent and 35 percent of the world’s NAND chips, used in smartphones and tablets, the CLSA report said. The company plunged 16 percent yesterday and was untraded as of 9:42 a.m.


Canon Inc., the world’s largest maker of cameras, said it would suspend operations at eight production and development facilities in northern Japan. Canon shares fell 4.1 percent.


Panasonic Corp. stopped operations at factories making digital cameras, audio equipment, electronic materials and devices, Akira Kadota, a spokesman for the Osaka-based company, said yesterday. The shares dropped 6.9 percent.

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