Although the initial temblors have stopped, the earthquakes that rocked Japan late last week and Saturday continue to roll through its auto industry today. Toyota today announced that it is extending the shutdowns of most of its assembly plants for a week. The automaker will begin phasing in its shutdown Monday. By April 23, the automaker will have shut down 10 assembly lines as they assess damages caused by the quakes.
Japan felt the effects of two strong earthquakes, on Thursday and the other Saturday. The quakes were centered off the island of Kyushu. The first quake struck the Kumamoto area of Japan on the southwestern island of Kyushu Thursday. The 6.2 earthquake hit Thursday night. A second temblor, that measured 7.0, shook the same area early Saturday. The earthquakes claimed 40 victims with more than 1,000 injured. Rescue workers are looking for further victims in collapsed buildings.
Automotive News reported today that the twin quakes increased the possibility of damage to the industry’s supply chain and may mean a further expansion of plant shutdowns as the industry faces the possibility not only of direct but also of indirect damage. The direct damage is to the automakers themselves while the indirect damage is to suppliers.
Sunday, Toyota announced that it is idling its top-line production plants near the Aichi district, close to the automaker’s headquarters. Also, plants in northern and western Japan have been temporarily shut. The vehicle manufacturer also said it is idling two assembly lines run by Hino, its truck-building unit, as well as another plant Daihatsu plant. Daihatsu makes minicars for Toyota. Finally, the automaker’s Kyushu plant will remain down. A spokesman for the carmaker, Ryo Sakai, said they will decide Wednesday whether production can resume April 25. Among the lines Toyota has idled are those of its flagship Lexus brand whose U.S. sales have been robust.
The quakes also impacted other automakers as Nissan halted production Saturday to check two of its plants located on Kyushu, where the quakes were centered. Both facilities received some light damage. On Sunday, Nissan said it would resume production at the plants on Monday after it had made an “assessment of our plants and supply chains.” Nissan’s quick restart is likely good news because among the lines that were shut were those that turned out the hot-selling crossover Rogue. Mitsubishi, feeling almost immediately its supply chain announced it would halt work at one plant Monday and Tuesday due to lack of parts.
For the auto industry, the key may not be each manufacturer’s infrastructure but those of the supply chain. For example, Renesas Electronics, which manufactures microchips that control the major systems in a car, has halted operations at a plant near the quake. In a case of deja vue, Renesas cut the flow of parts in 2011 when a major earthquake took an essential plant down. For months that year, the microchip supplier found that its plant in northeastern Japan – Kumamoto – was down. And now, the chip manufacturer is down again. The good news for Renesas is that after regaining access to the site in Kawashiri, it appeared the damage was far lighter than in 2011, though, a spokesman for the supplier had no estimate as to when it would be back online.
Meantime, a second supplier Aisin Seiki halted operations at two plants in Kumamoto City. Survey crews had yet to complete an inspection.