U.S. News

Japan Auto Output Hit as Quake Disrupts Supplier


At least four Japanese automakers including Toyota Motor said on Wednesday they would suspend production after an earthquake hit the factories of a major parts supplier.

The quake on Monday in northwestern Japan, which killed nine people, damaged the factories of piston ring maker Riken Corp.

Toyota, Japan's largest automaker, said it would suspend output at all 12 of its directly owned domestic car and parts factories for half a day on Thursday and all day on Friday due to difficulties in procuring supply from Riken.

A spokeswoman said Toyota did not know how many vehicles would be affected.

Suzuki Motor, Mitsubishi Motors and Fuji Heavy Industries, the maker of Subaru cars, also said they would halt production at some factories. Honda Motor said some of its car and motorcycle production could also be stopped next week.

Riken's shares fell 1.% on Wednesday to 616 yen, taking its losses since the quake to 5.5%. The auto subindex fell 1.1% on Wednesday.

"There's probably going to be some impact," Honda Chief Executive Takeo Fukui told a news conference on Wednesday. "We're still investigating and don't know how big the impact will be."

Suzuki, which makes compact cars and motorcycles, will suspend production at five domestic factories, including two car assembly plants, for three days starting on Thursday. That would lead to a production loss of about 10,000 cars and 5,000 motorcycles, a spokesman said.

The automaker will assess later in the week whether production can resume next Monday, he added.
Making Up For It Later

Tokyo-based Mitsubishi Motors said it would suspend production for a few days at three assembly plants. It did not specify the scale of lost production but said it would make up for it using holidays at a later date.

Subaru-brand maker Fuji Heavy will halt production on its mini-vehicle line from Thursday's second shift until Saturday, the equivalent of 1,500 units.

Monday and Tuesday are planned company holidays, and while Fuji Heavy wants to resume production from Wednesday, it will make a decision later this week, spokesman Kenta Matsumoto said.

Other major automakers including Nissan Motor and Mazda Motor said they were still making checks with Riken.

Credit Suisse auto analyst Koji Endo said he saw no cause for alarm. "We have had these kinds of incidents over and over, whether it's a typhoon or fire or earthquake. It's not that significant," he said, adding he expected automakers would be able to make up for a one-week suspension in about three days of longer, intense production.

Another Honda executive said it may be possible to seek parts from another supplier but added it would take time to test them for compatibility and quality.

Teikoku Piston Ring, another major maker of piston rings, said it had requests from several automakers to supply parts to partly make up for lost production at Riken. A spokesman said the company had not made a decision yet on whether or how to meet those requests.

NOK and Nippon Piston Ring said they were asked by several parts and automakers whether they could substitute as well, if the need arose.

Riken said it was unclear when production would resume at its plants. It has two piston ring plants and nine affiliated plants in and near Kashiwazaki, the city worst hit by Monday's quake.

The company said it had half of the domestic market for piston rings and around 70% of the market for seal rings, which prevent oil leaks in automatic transmissions and continuously variable transmissions.

Riken said it would take a few days to reposition equipment knocked around by the quake, after which it would need to undertake precision and quality checks. Gas and water supplies have not yet been restored.