Tags: Toyota | Europe | Shutdowns | Japan | Supply | Fears

Toyota Europe Shutdowns Add to Japan Supply Fears

Wednesday, 13 Apr 2011 09:20 AM

Auto makers in Europe are bracing for more supply chain disruption after Toyota Motor announced production cuts on the continent due to last month's earthquake and tsunami in Japan.

Toyota said late on Tuesday it would stop production in five European plants for several days in April and May because of a shortage of supplies from Japan.

"It's extremely likely it will get worse before it gets better," said IHS Global Insight analyst Paul Newton. "We don't really see it getting better until the middle of the year."

Carmakers can look for alternative suppliers for their parts, but if re-engineering is needed to incorporate them, this will be costly and take time, Newton said.

Daimler Chief Executive Dieter Zetsche told the Mercedes-Benz maker's annual meeting on Wednesday that he could not rule out disruption to Daimler's supply chain.

"We are working very hard to avoid this and to minimize any repercussions."

SALES HIT?

Toyota and Honda Motor, which last week said it would halve UK production because of a shortage of some parts, may lose out to rivals as buyers flip to other brands, Newton said.

But the affect on overall European sales will be limited, Newton said.

In 2010, Toyota had a market share of about 4 percent in the European Union, and Nissan just under 3 percent, compared with about 20 percent for Volkswagen and 13.5 percent for PSA Peugeot Citroen.

Toyota said its Burnaston and Deeside plants in Britain, sites in Adapazari in Turkey, Valenciennes in France and Jelcz-Laskowice in Poland will close on April 21, 22, from April 25 to 29 and on May 2.

"Even if the supply chain has not yet been interrupted, short-term parts shortages are foreseeable," the company said, adding that it also expected a drop in vehicle output in May. Toyota said it had not made production decisions beyond May.

Ford idled its plant in Genk, Belgium for five days at the beginning of April to conserve parts where the supply was threatened by the Japan disaster.

French carmaker Renault, whose partner is Japan's Nissan Motor, said it was still analyzing the situation, but no plants had been closed so far.
Renault is facing unrelated supply chain problems linked to supplier capacity cuts made during the industry crisis, leading to a 12.4 percent dip in March sales.

PSA Peugeot Citroen, Europe's second-biggest carmaker, temporarily reduced production last month at some European sites due to cuts in supplies from its key Japanese partner Hitachi.

The company said production was returning to normal, but it could face further disruption in the future.

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Auto makers in Europe are bracing for more supply chain disruption after Toyota Motor announced production cuts on the continent due to last month's earthquake and tsunami in Japan. Toyota said late on Tuesday it would stop production in five European plants for several...
Toyota,Europe,Shutdowns,Japan,Supply,Fears
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2011-20-13
 

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