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Toyota Set to Reopen Third Factory

Posted by admin On April - 8 - 2011
Toyota

Assembly lines at the Saga Mihara factory are set to begin rolling again come April 11th. The facility, south of Tokyo, was one of 18 Toyota factories shut down and affected by the earthquake and tsunami that rocked Japan in mid-March. It joins two other Toyota plants that resumed production around March 28th.

The factories in question produce Toyota and Lexus brand cars. Much of their production is geared towards hybrids within these two lines. This is a reversal of pre-disaster plans to actually wind down production at the Saga Mihara facility and shift operations to a new facility in the Miyagi prefecture. That new facility was damaged as a result of the natural disaster and forced Toyota to adopt an entirely different approach as many other businesses have.

Japan-based automakers are finding the biggest challenge in resuming production to be logistics. Companies like Toyota, Nissan, and Honda are unable to get small plastic and rubber parts as well as electronics to the facilities needed for efficient production. Manufacturing facilities in the United States and other parts of the world have not been affected as drastically. This may change in the next couple of weeks when surplus and back ordered part reserves are finally spent.

Toyota spokesman Paul Nolasco set to rest rumors that facilities in the United States were preparing for shutdown. Despite some published reports, this is not the case nor does Toyota have any plans to do so. Toyota has reported their production goal was 200,000 units behind as of April 1st. This reduction is due solely to the shut down plants in Japan. Facilities in other parts of the world have maintained steady production.

Currently, Toyota is the world’s largest auto manufacturer and was dealt a sizable setback with many other companies. Their own plans for recovery, getting their workers back to the assembly lines, and resuming a sense of normalcy continue to plod forward. Though fifteen Toyota factories are still closed due to the earthquake and tsunami, Toyota is confident in its ability to recover and push forward in the coming weeks as Japan rebuilds.

Toyota to Ration Spare Parts to Dealers

Posted by admin On April - 5 - 2011
Toyota

The recent earthquake and subsequent tsunami that struck Japan is having a harsh effect on the automotive industry. Concerns abound amongst manufacturers of dealers hoarding spare parts to better provide for the customers they need to serve. Manufacturers such as Toyota are working to avert this by putting a limit on how much and what a dealer is able to order.

The tsunami destroyed and washed large sections of Japan’s economic infrastructure away. That includes plants that were responsible for over 20% of the world’s semiconductor production in addition to small plastic and rubber parts. An automobile is a combination of many different moving parts that must work in relative harmony. Even the loss of one part can drastically affect the vehicle’s performance.

Manufacturers are struggling to get facilities opened and production restored in the aftermath of the disaster. Rolling blackouts and brownouts prevent large scale production from once again getting under way. Extensive water damage of the plants that were not utterly destroyed is still in the process of being repaired. Many manufacturers have cited estimates of mid-summer being the earliest they can get back to meaningful production.

In the meantime, other areas where these parts are produced are stepping up their production to try and fill some of the gap. Several dealers are already exploring other supply routes to ensure another disaster does not have a similar impact on their ability to provide.

A car buyer would do well to keep an eye on prices before deciding to purchase a new vehicle. The lack of parts creates the ideal circumstances for prices to rise due to the principle of supply and demand. Those in immediate need may be able to less expensively meet their goals with the purchase of a used car. That route features its own pitfalls if the automobile happens to require extensive service and maintenance.

More manufacturers are expecting to be following suit behind Toyota to ensure there is some level of fair distribution in several areas. In the meantime, aid flows in and the world watches as Japan strives to get cleaned up with a sense of normalcy restored.

Current Events in Japan and Libya Impact Automakers

Posted by admin On March - 25 - 2011
Japanese-Automakers

World events that shake a country often send rippling effects through economies around the world. The unexpected war in Libya and earthquake in Japan are both having a negative effect on automakers around the world.

Libya is a major producer and provider of the world’s oil with its reservoirs in the eastern portion of the country. The conflict that erupted between rebel and government forces essentially shut down much of their oil production. Prices of oil have risen as a direct consequence.

One in five microprocessors is made in Japan. That is not great news when considering the vast number of places a microprocessor is used in today’s automobile. GPS, diagnostic computer, fuel mix, and more; all make use of microprocessors. Analysts cite concerns over the effect of the hit in production of small plastic and rubber parts. Some manufacturers are reporting discontinuation of certain paint pigments that are now in tumultuous supply.

The infrastructure of Japan took such a sharp hit, that even now it is difficult for production to get back on track. Aftershocks and power losses make it impossible to resume normal production activity.

United States auto manufacturers have all put together emergency teams to figure out alternate ways to navigate this difficult time. Many are trying to avoid plant closures by taking the first step of cutting back scheduled overtime. Some manufacturers have already been forced to close plants. This comes at a time when the auto industry was beginning to make a rebound.

The effect these circumstances will have will be varied. Automakers are expected to start running out of their surplus inventories within 8 weeks. Many have begun to shift production to vehicles that do not require a lot of electronic subcomponents. Vehicles with higher profit margins are being given priority for available parts. The automobiles that do will see rising prices in the long run as demand tightens for sought after parts.

Weathering the storms of the world economy is something the automaker industry has done several times. The recent events in Japan and Libya really set the bar high for manufacturers while trying to handle the effects of these disasters. Even now they are working to find alternate suppliers and solutions to these problems.

Regardless of how one looks at any of this situation, a common economic principal will come into play. Less supply means higher demand and higher prices. If you are considering buying an automobile, prices are going to be increasing as the world feels the effects of these events and mourns the tragic losses.

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