Toyota, Honda, Nissan Plants Shut Down After Earthquake And Tsunami Hit Japan

The devastating earthquake in Japan has threatened to impact the exports of Japanese vehicles and auto parts coming into the United States. Toyota, Honda and Nissan all suspended production at a few of their plants in Japan today as they assessed the damage of the earthquake.

The earthquake is said to be the fifth largest in the world since 1900 and the biggest in Japan in a 140 years.

Cars like the Toyota Yaris sedan, the Scion XB and Scion XD, the Honda Fit small car, the Accord sedan and CR-V crossover are likely to be affected.

All major ports in Japan were also shut down as a result of the earthquake, potentially further delaying North American exports.

Toyota, which has a large manufacturing presence in northern Japan, has been affected the most, with closures halting production of cars like the Yaris sedan and the Scion xB and xD models. Toyota’s Tohoku car parts factory production was also shut, and production was suspended at a plant that Toyota runs with Panasonic Corp that produces hybrid vehicle batteries.

Honda’s Sayama plant, which manufactures the Fit among other cars (the Fit is exported to the U.S.), remains closed.

Nissan halted production at all four of its auto assembly plants in Japan, while all five of Subaru’s auto assembly and parts plants also halted operations.

The shutdown comes as U.S. demand for smaller, more efficient cars — like the Fit and Yaris — has gone up due to high gasoline prices.

Significant infrastructure damage also has a damning effect on the shipment of auto parts coming in from Japan.

Thankfully, a few plants still remain open. The Toyota plant in Japan that makes the Prius, was operational, a U.S.-based Toyota spokeswoman. Also, Honda’s production line is least likely to be affected since over 91 percent of the company’s cars and trucks sold in North America are made locally.

The last time U.S. gasoline prices were as high as they are now, Toyota had increased its lineup of its much more-fuel-efficient models. Hopefully, things will settle down sooner than later, this time around too.

Toyota affected by tsunami

Tsunami In Japan Affects Toyota

Several facilities of Toyota, Honda and Nissan in Japan had suspended its activities on account of damage caused by the massive earthquake and tsunami that hit the country. According to the agency Automotive News, there are reports of fires in factories and even a fatality. Besides the destruction of property and loss of personnel, manufacturers also will affect their exports, especially to the United States.

According to the source, the Honda stopped its activities in two factories. The Sayama plant reported fires and one person died. There are made CR-V and Acura models in the line, mostly to the US. Toyota already broke the rhythm of four plants, including facilities in Kent, one of its largest factories in the world. The same plant is also responsible for producing cars of Scion, a group of Japanese flags. According to the publication, all of these units will remain closed during the weekend.

Nissan also took a hard blow. The tsunami struck the company’s factory in Tochigi, just where is made ​​the famous GT-R. The same production platform also assembles models sedan from Infiniti, the luxury division of the brand. There was still the record unit of small fires which were quickly extinguished. There were no casualties and theinstallation will also be frozen during the two days.

Because they are factories for export products, the affected units are strategically built in regions near the sea, which reduces the cost of freight to the ports. There are no reports of damage to units from other Japanese automakers, which have also installations in the areas affected by the waves.

Toyota stock trading in New York affected by Japan earthquake

Damage from the 8.9-magnitude earthquake and resulting tsunami in Japan is causing more than production suspensions at plants in Japan. Pre-market hours trading in New York shows a down opening.

Question for investors is, how deep will the quake affect Toyota stock and other automotive stocks? The 30-minute chart shows premarket and 10 minutes into the New York opening.

The rolling of stock prices started in Tokyo and registered in Australia, before it hit Europe, but the message was the same. In New York’s pre-market, Toyota stock opened down to 80.88 from 85.60 and has been trading down ever since, trading at 80.80 at the opening bell and rose 10 minutes later to 81.25.

The question for traders was not whether Toyota stock would be affected, but by how much due to production shutdowns, the root cause of lowered profit expectations.

According to a Monday report from Tokyo by Automotive News with contributions for theBloomberg News service, the shutdown could even affect exports to the United States of more cars than just the Toyota Yaris sedan. The report also noted Scion XB and Scion XD, as well as the Honda Fit subcompact.

Toyota, the world's largest carmaker, said it evacuated workers from several factories in the quake zone. For the record, Toyota has two parts plants in northern Japan and two affiliates, Kanto Auto Works Ltd. and Central Motors Co., that assemble small cars in the region.

From a stock perspective
Early in the Asian session on Monday, Japan’s blue-chip Nikkei Stock Average (JP:NI225 9,790, -464.88, -4.53%) dropped 4.7% to 9,771.93, while the broader Topix fell 6.7% to 854.28. Earlier, the Nikkei Average was down more than 5%, and the Topix by more than 7%

The sell-off was also broad-based, and especially included Toyota Motor Co. (JP:7203 Yen 3,335, -260.00, -7.23%) . As a point of reference, Toyota (TM) stock closed Friday in New York in USD 85.65, down 1.87 or 2.14 percent.

For the record, Toyota recently made great gains after the U.S. government reported no defects in Toyota’s software and electronic-controlled accelerator systems.

Now the stock could find support near 81 or lower at 77, the swing lows of early January.

Quake halts Toyota

Japan’s worst earthquake and tsunami ever has shuttered auto, electronics and other manufacturing plants in that country Monday, and experts warn that the impacts are likely to ripple through the global economy.

Operations at Toyota, Sony, Toshiba and several other major Japanese manufacturers have ground to a halt as the country grapples with the growing humanitarian and nuclear crises.

Sony, Japan’s largest consumer electronics exporter, said in a statement Monday that while only its Sendai Technology Center sustained earthquake damage, the company has temporarily and voluntarily closed a half dozen plants in other parts of the country due to widespread power outages.

Those plants, the company said, make a variety of electronic equipment and components, from Blu-ray discs and optical devices to semiconductor lasers and lithium-ion batteries.

Toyota said that while there were no injuries at the company’s facilities, operations at several plants that produce parts and vehicles have been temporarily suspended, including the Kanto Auto Works Iwate plant, which produces the Scion xB and Scion xD, and the Miyagi plant, which makes the Yaris model.

Toshiba Corp., a large exporter of computer chips, said Monday that it will cooperate with Tokyo Electric Power Company’s request to cut electricity consumption in Japan by operating only essential services. The company Monday closed all of its premises in areas with power outages, aside from its headquarters and essential business operations.

In Japan, stocks also were hammered Monday, with the Nikkei index ending down by more than 6 percent, as investors reacted to last week’s massive earthquake.

The earthquake and an ensuing tsunami devastated much of the country’s northeastern region and left several nuclear power plants in peril, leaving wide swaths of the nation without electricity.

“Because of this nuclear meltdown, I suspect Japan is going to be shut down a lot longer,” said Peter Morici, a business professor at the University of Maryland and former chief economist at the U.S. International Trade Commission.

Japan is one of the world’s largest exporters — behind a handful of nations such as China, the U.S. and Germany — and exported $781 billion in goods in 2008, according to the Organisation for Economic Co-operation and Development (OECD).

Many of Japan’s largest exporters have expanded operations abroad, including in the United States, as the Asian nation has faced internal economic pressures and as its population ages. Some experts believe that the earthquake and its aftermath will accelerate that trend.

“Japan is destined to shrink unless they do something about the population problem, but this may accelerate the process of industry going elsewhere,” Morici said. “Any of the companies that really have a global brand and special technical expertise — such as Sony and Toyota — this is going to accelerate the process of expanding someplace else.”

However, don’t look for that expansion to take place in the U.S., he added. “If things were better here, yes,” Morici added. “China is likely to be the winner in all of this.”

Other nations have rebounded from natural disasters in years past. But in a larger country, such as the United States, a disaster such as Hurricane Katrina could devastate one region and businesses might relocate to another area.

However, Japan has a history of devastating quakes and has a large reliance on nuclear energy to fuel its economic engine.

“If it wasn’t for the nuclear power situation, a year from now it would not be as large as you would think,” said Morici. “If Toyota shuts down for two weeks, they can probably make up production for the model year and not lose much output.”

The nuclear crisis, however, likely changes that forecast.

Earthquake, tsunami slow Japanese auto production

WAUSAU -- Local auto dealerships and repair centers anticipate trouble keeping Japanese-made vehicles and parts in stock as that country recovers from a devastating earthquake, tsunami and nuclear emergency.

All Toyota Motor Corp. vehicle plants operating in Japan will be closed through Wednesday, according to a news release issued by Toyota. The Japanese plants manufacture the Prius, the Yaris and Scion vehicles.

The plants that manufacture replacement vehicle parts in Japan also were closed in the wake of the tragedy, but will resume operation today.

"This will allow us to take care of current Toyota owners who may need repairs," the Toyota news release said.

Managers at Ballweg Toyota of Wausau on North 20th Avenue expect to have a shortage of the Prius as demand rises with gasoline prices, general sales manager Josh Harris, said.

"We foresee that it's going to be a situation similar to 2008, when people were put on the waiting list for a Prius," Harris said. Gas prices peaked in 2008 causing more consumers to buy the energy-efficient Prius. Dealerships then didn't have enough cars in stock, Harris said.

Typically, the Wausau dealership keeps 30 Prius models in stock. But with increased interest in the vehicle, the dealership had just 10 earlier this week, Harris said. If manufacturing of the Prius is not restored quickly, the dealership will have problems getting it for customers, Harris said.

Toyota keeps an overstock of vehicle parts in the U.S., Harris said. Getting parts is not a concern for a few months.

At Firestone Complete Auto Care, store manager Kenny Krautkramer said it's still too soon to know whether it will be difficult to find parts for customers who own Japanese-made vehicles.

"The focus is more about lives right now rather than parts," Krautkramer said. "We'll have to wait a while to find out more."

At CW Auto Clinic in Wausau, Manager Dale Krenz said U.S. auto centers likely will have Japanese-vehicle parts in full supply for another six months.

Warren Kaye, a sales representative at Kocourek Wausau Imports, said the Nissan models as well as Nissan vehicle parts sold at the dealership are manufactured in the U.S.

Representatives with Fred Mueller Mazda in Schofield were not available for comment Wednesday.

All 13 vehicle and engine plants in the U.S. are operating normally, according to a Toyota statement.

Statement on Tsunami by Toyota

Mar 13, 2011 - NEW YORK, NY - Toyota's associates and team members in North America extend our heartfelt sympathy and deepest condolences to the people of Japan, our colleagues and their families.

 

Our utmost concern has been the safety of all Toyota Motor Corporation (TMC) team members and team members at our partner companies in the Tohoku region.

 

TMC has established a company-wide emergency task force to continually assess the situation and take initial measures.

 

On 3/11, Toyota was able to confirm that there have been no injuries at the Tokyo head office, as well as the Higashifuji, Tochigi office, Yamanashi office, Toyota Motor Tohoku facilities and TMC subsidiary vehicle manufacturers

 

While TMC plants were able to restart production on 3/11, plants that stopped production are Toyota subsidiary plants that produce parts and vehicles, including:

 

• Toyota Motor Hokkaido Plant
• Toyota Motor Tohoku Plant
• Central Motor Corporation Miyagi Plant, which also produces the Yaris model.
• Kanto Auto Works Iwate Plant, which also produces the Scion xB and Scion xD.

 

Employees at these facilities were evacuated to safe areas.

 

We are now conducting a detailed survey of each plant to determine the extent of any damage. We are also currently assessing the situation at our suppliers, dealers and the impact on North American import vehicles.

 

As we are committed to ensuring the safety of our team members and their families, Toyota has decided to suspend production at all TMC plants, as well as all subsidiary vehicle-manufacturing plants on Monday, March 14th.

 

Toyota’s number one priority is to support our team members at TMC, our partner companies, suppliers and dealers through this situation. On behalf of the company globally, TMC is moving to donate 300 million yen for relief and recovery efforts in communities affected by the Tohoku Earthquake and is also considering the provision of goods and services as needed.