Japan firms' output hit by floods Skip to main content

Japan firms' output hit by floods

Toyota on Wednesday said production at its three Thailand plants would be halted until at least Saturday, with the operations of many Japanese firms crippled by the country's worst flooding in decades.
An aerial picture shows cars submerged in floodswaters at a Honda car factory outside the ancient Thai capital of Ayutthaya, north of Bangkok on October 11. Toyota has said production at its three Thailand plants would be halted until at least October 15, with the operations of many Japanese firms crippled by the country's worst flooding in decades.

Automakers such as Toyota, Honda and Isuzu have suspended production due to direct flood damage to facilities or because of the heavily disruptive impact of the flooding on their component supply chains.
Massive inundations have left hundreds dead across Thailand, Cambodia and Vietnam, with authorities stepping up efforts to reach victims of unusually heavy monsoon rains.
In Thailand the floods have damaged the homes or livelihoods of millions of people, particularly farmers, across about three quarters of the country's provinces.

Nearly 300 people have died in more than two months of floods according to the government, while more than 200 people have died in neighbouring Cambodia.
Rescue workers and government teams have scrambled to boost flood defences to prevent waters from flowing into Bangkok, the country's economic and financial heart.

Analysts say that the automakers in Thailand rely on the same kind of super-efficient "just-in-time" component supply schedules that were crippled in the wake of Japan's March 11 earthquake and tsunami.

An average car contains around 20,000 different components, and only one needs to be missing to stop production.

Japan's biggest automaker Toyota said that while floods have not directly impacted its Samrong, Gateway and Ban Pho plants, away from the worst-affected areas, "some suppliers are experiencing delays in supplying parts".

Operations at its three plants have been halted since Monday and Toyota said the suspension would continue at least through Saturday's morning shift, when the company would take a decision on whether to resume.

A Toyota spokeswoman told AFP that annual production capacity at the three plants totals 650,000 units. In 2010, the plants produced 630,000 units.

"We still cannot say how many units will be affected by the latest production halt," she said.
Toyota shares fell 0.30 percent in Tokyo trade.

In Thailand's ancient capital Ayutthaya, about 80 kilometres (50 miles) upriver of Bangkok, historic temples have been swamped and a large industrial estate, home to several Japanese electronics and auto parts makers including car giant Honda, has been flooded.

Honda said it will suspend operations at its three plants for vehicles, motorcycles and engines in Thailand -- including two in Bangkok -- at least until Friday, a Honda spokeswoman said.

Its Ayutthaya plant has an annual production capacity of 240,000 passenger and sports utility vehicles, the spokeswoman said, adding that it was unable to assess damage due to an evacuation order for the area.

The shutdown may hit the production of an estimated 4,500 vehicles and 48,000 engines, the spokeswoman said. Honda shares lost 2.21 percent to 2,295 yen Wednesday.

Mitsubishi Motors said it will suspend operations at its Thai plant, where it can produce 200,000 vehicles a year, from Thursday night to Saturday due to supply problems, expecting production to be cut by 1,500 units.

Isuzu Motors has decided to suspend operations at least this week at its plant, which has an annual production capacity of 288,000 pickup and other trucks, a spokesman said.
Nissan Motor said it has yet to suspend its plant in the country, where it produces 220,000 cars a year.

Shares in Nikon, which produces lenses and single-lens reflex cameras in Thailand, plunged 3.47 percent to 1,780 yen on investor concerns about the potential impact of the floods as it prepares for the year-end shopping season.



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