Japanese automakers have been forced to suspend vehicle production at their assembly plants across the country as recent earthquakes in Kumamoto Prefecture have seriously disrupted auto parts supply chains.
Toyota Motor Corp. says it will suspend operations at 15 assembly plants -- almost all of its plants in the country -- in stages by April 23. Other automakers are also set to suspend vehicle production. Automakers have been hard-pressed to take urgent measures such as shifting the production of auto parts to other areas, as there is no prospect of parts factories resuming operations while aftershocks continue to hit the Kumamoto region.
On April 15, Toyota Motor Kyushu Inc., based in Fukuoka Prefecture, suspended operations at two parts factories and one other plant. Toyota will also suspend operations at a further 10 factories including those run by Miyagi Prefecture-based Toyota Motor East Japan Inc. in stages by April 23, in addition to four Toyota factories in Aichi Prefecture. This will likely delay the production of tens of thousands of vehicles.
Toyota's vehicle production has suffered greatly due to the suspension of factory operations at Kumamoto-based Aisin Kyushu Co. -- a top supplier in Japan of auto parts, such as those for doors. The company is affiliated with Toyota. Toyota employs a production method avoiding inventory buildups, meaning it tends to suspend operation of its production lines early in case of emergency.
Apart from Aisin Kyushu, there are many factories in Kumamoto Prefecture, such as Ozu-based Chuo Malleable Iron Co., that supply engine-related parts to the Toyota group. A senior Chuo Malleable Iron official commented, "We have no clear idea as to when we can resume operations."
Having learned a lesson from being forced to completely halt vehicle production in the wake of the Great East Japan Earthquake, Toyota built information networks covering production of about 4,000 types of auto parts. Using these networks, the company sorted out which supply chains were disrupted early on April 15, hours after a magnitude-6.5 earthquake struck the Kumamoto region. Toyota subsequently started shifting parts production to alternative factories run by business partners. But a senior Toyota official said, "It will likely take time to start alternative production. It's no easy task." Toyota plans to decide around April 20 whether to resume operations at factories next week and beyond.
The supply chain disruptions have been affecting other automakers as well. Mitsubishi Motors Corp. decided to partially stop production at its Mizushima Motor Vehicle Works factory in the Okayama Prefecture city of Kurashiki between the evening of April 18 and April 20. Daihatsu Motor Co. will suspend operations at its Kyoto factory in the Kyoto Prefecture town of Oyamazaki from April 20 to 23. Nissan Motor Kyushu Co. resumed operations on April 18, but an official at the company's public relations department said, "We are reprioritizing models that can be produced with parts in stock."
Damage to Renesas Electronics Corp.'s production subsidiary factory in Kumamoto has brought further repercussions. The company supplies microcomputers to multiple auto parts makers. A company official said, "We have no idea of when we can resume operations." Suspension of microcomputer production at the factory could further affect vehicle production.
Meanwhile, Chief Cabinet Secretary Yoshihide Suga said at a news conference on April 18 that the government would consider taking necessary measures, such as providing emergency financial aid for businesses affected by the earthquakes, focusing on manufacturers. Suga said that the suspension of operations at factories in the quake-struck region would "affect the entire supply chain, extending to related subcontractors and other businesses." He went on to say, "We will respond quickly to minimize the impact on the Japanese economy."