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Japan crisis halts car production, cripples supply chain

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The massive earthquake and ensuing tsunami that wreaked havoc across Japan last week has shuttered car factories across the country as automakers grapple with the death, destruction and blackouts.

Toyota, Honda, Nissan, Mazda, Subaru, Mitsubishi  and Suzuki have all halted vehicle production until at least mid-week. Even in factories like Mazda’s that escaped damage, massive problems are set to play out in the supply chain.

The average vehicle uses tens of thousands of parts, many made by third-party suppliers. According to Automotive News, Honda alone uses 113 suppliers in the quake zone, and it can’t get in touch with 44 of them.

“We cannot complete a car, even if one or two parts are missing,” Honda spokesman Keitaro Yamamoto said. “So it’s better that we stop production altogether.”

Most of the automakers have suspended production until at least Wednesday as they assess damage and give workers time to try to reconnect with families. Honda factories will remain closed through at least Sunday.

At this time, it is unknown how exactly the cessation in production of tens of thousands of cars a day will affect the U.S. and wider global economy. And even Japanese automakers with production facilities in the U.S. face potential problems if they can’t get parts made in Japan.

Automakers’ stocks also took a beating today in Japan’s exchange, with Mitsubishi falling the most with a nine percent decline.

Meanwhile, thousands of brand-new cars that were set to be shipped to the U.S. and abroad were destroyed from the massive waves of the tsunami. Nissan alone lost 2,300 new vehicles in the Port of Hitachi, many of them Infiniti luxury vehicles that cost $50,000 or more.

Other cars ended up on fire after being battered by waves and then colliding with each other, a scene tragically played out in the photo above.

“Bottom line — we are happy no one is hurt,” Nissan executive Andy Palmer told Automotive News after loss. “We can build new cars.”

Full quake, tsunami coverage

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In other news:

Photo: Firefighters, bottom, hose over still smoldering cars among hundreds vehicles being swept and caught fire following a devastating tsunami in Hitachi, Ibaraki Prefecture, northeast of Tokyo, Saturday morning, March 12, 2011, a day after strong earthquakes hit the area. (AP Photo/The Yomiuri Shimbun, Atsushi Takedazu)

Japan crisis halts car production, cripples supply chain is a post from: Auto Motion


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