Tags: Japan March Auto Sales Slump in Quake Aftermath

Auto Sales in Japan Drop in Quake Aftermath

Friday, 01 Apr 2011 12:41 PM

Vehicle sales in Japan fell by more than a third in March as a devastating earthquake, tsunami and resultant nuclear crisis wreaked havoc on assembly plants, parts manufacturers and the global supply chain.

Sales, excluding 660cc minivehicles, fell 37 percent for the industry overall, and industry leader Toyota Motor Corp. saw sales for the month tumble 46 percent, the Japan Automobile Dealers Association said on Friday.

It was the industry's biggest monthly percentage fall since February 1974.

Nissan Motor Co.'s Japan sales slumped 38 percent and Honda Motor Co. retreated 28 percent. The figure for Toyota excluded the Lexus brand.

The latest numbers give the first indication of how Japan's car makers are faring in their home market after the March 11 earthquake and tsunami that devastated northeast Japan and triggered power outages and the worst nuclear crisis since Chernobyl.

Many of Japan's auto plants are closed in the wake of the disaster, unable to get parts from suppliers.

All but two of 18 factories that assemble Toyota and Lexus vehicles in Japan remain idle.

Toyota Motor President Akio Toyoda said on Friday that the devastating earthquake and tsunami in northeast Japan would hurt the company's earnings, but said that was not on his list of priorities.

"We're not thinking about numbers right now," Toyoda said at the company's headquarters in Toyota City, adding he could not estimate the scope of the impact.

Deutsche Securities this week slashed its forecast for Toyota' operating profit by 84 percent to $1.7 billion for the current business year due to production outages.

Toyoda repeated the company's stance that it is uncertain when it can resume full production after the March 11 disaster disrupted its supply chain.

Honda and Mazda Motor Corp. said on Thursday they would resume some production in Japan.

Honda said it would resume production of parts for overseas use on April 4 and production at all its car factories on April 11. Honda also said production cuts at its plants in the United States and Canada would last through April 15.

Mazda Motor Corp. said it plans to restart limited production of vehicles from April 4 at its Hiroshima and Hofu plants. A decision on the resumption of full-scale production of both parts and vehicles has not been made.

PMI RECORD DECLINE

As might be expected, Japanese manufacturing activity slumped to a two-year low in March and posted its steepest monthly decline on record after the disaster disrupted supply chains and production operations, a survey showed on Thursday.

The Markit/JMMA Japan Manufacturing Purchasing Managers Index (PMI) fell to a seasonally adjusted 46.4 in March, the lowest since April 2009 and down from February's 52.9. The data provided one of the first quantitative assessments of the severe damage to production from the March 11 quake and tsunami in northeast Japan, which triggered a nuclear safety crisis and widespread power shortages.

"The impact from the power outage, supply chain disruption and a halt of many factories' activity after the quake is large. There is a possibility that the PMI index will further weaken," said Takeshi Minami, chief economist at Norinchukin Research Institute in Tokyo.

"It is a major issue now how the nuclear crisis develops, and stock market players are also closely watching it. The outlook for business activity depends on progress in reconstruction and recovery."

The Bank of Japan's closely watched Tankan survey showed Japanese manufacturers' business sentiment improved slightly in the three months to March, but analysts anticipate a downturn in confidence this quarter because of the disaster.

The BOJ's quarterly Tankan survey showed the headline index for big manufacturers' sentiment improved to plus 6 in March from plus 5 in December, compared with a median market forecast of plus 7.

But 72 percent of replies for the survey came in before the earthquake, which means it did not much reflect the impact of the earthquake, the tsunami and the world's worst atomic crisis in 25 years.

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Vehicle sales in Japan fell by more than a third in March as a devastating earthquake, tsunami and resultant nuclear crisis wreaked havoc on assembly plants, parts manufacturers and the global supply chain. Sales, excluding 660cc minivehicles, fell 37 percent for the...
Japan March Auto Sales Slump in Quake Aftermath
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Friday, 01 Apr 2011 12:41 PM
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