UpdateJAPAN DISASTER: Automakers’ shares end higher amid restarts

22 March 2011 09:46  [Source: ICIS news]

(updates share prices, death toll and latest announcements by Honda and Toyota)

By Nurluqman Suratman

SINGAPORE (ICIS)--Shares of Japan’s major automakers ended mostly higher on Tuesday amid expectations that their operations would be restarted or ramped up this week after they were halted by the earthquake that struck the country's northeast on 11 March.

Shares of Toyota Motor ended 4.04% higher on the Tokyo Stock Exchange, while Honda Motor rose 2.11%. Nissan Motor, meanwhile, bucked the trend and slipped 0.13% at the close of trading.

Mazda Motor was up 4.94%, while Fuji Heavy Industries, the maker of Subaru cars, was 3.19% higher.

These automakers are expected to resume some operations this week after shutting their plants from 14 March because of safety issues in the wake of the 9.0-magnitude earthquake and the tsunami that followed.

On Monday, Nissan restarted the production of parts for overseas manufacturing and repairs at its Oppama, Tochigi, Yokohama, Kyushu and Nissan Shatai plants.

Vehicle production is expected to start on 24 March and will continue while supplies last, the company said in a statement.

“As for the Iwaki engine plant, with aftershocks still heavily impacting the region and infrastructure re-establishment still continuing, restoration is expected to take longer than the other plants,” the statement said.

Toyota, Japan’s largest automaker, said on Tuesday it will keep all of its 12 assembly plants in Japan shut at least through 26 March, according to a Reuters report.

The company previously said it would keep the plants shut until 22 March.

Toyota earlier said it would begin production of car parts at plants near its base at Toyota City in central Japan for overseas assembly facilities from 21 March.

It had also said it would resume making parts for service centres this week to repair vehicles already on the road.

Meanwhile, Honda said on Tuesday it has extended its production suspension in Japan until 27 March from 23 March because of difficulties in acquiring parts from its suppliers.

The production suspension includes Honda’s automobile plants in Sayama and Suzuka as well as a motorcycles factory in Kumamoto.

Among other car markers, Mazda is expected to resume temporary production at two plants in the southwest from 22 March, while Fuji Heavy Industries said it will suspend production at all Subaru car plants in Japan until 24 March.

Fuji Heavy Industries plans to restart making parts for overseas production on 23 March and producing spare parts a day later, the company said in a statement on Monday.

Despite the restarts, issues with the Japanese automobile industry are quite serious, and the situation is unlikely to return to normalcy soon, economic research and forecasting firm, IHS Global Insight, said in a note on 21 March.

Many automakers in Japan are facing serious supply disruptions, not only damages to their plants, but also problems such as rolling blackouts, infrastructure damage, port and shipping issues, the firm said.

“The initial estimates are that this could be a protracted shutdown of the Japanese industry as well, as it is not just simply a matter of repairing plants, but of repairing infrastructure, regional power-generation ability, and even replacing workers from communities that have lost thousands upon thousands of people to the disaster and resulting in displacement,” it added.

The number of people reported killed or missing following the natural disasters on March 11 topped 21,000 on Tuesday, according to data from the National Police Agency of Japan.

As of 15:00 hours Tokyo time (06:00 GMT), 9,079 people were reported dead, with 12,782 missing and 2,633 injured, the data showed.

Disruptions at Japanese suppliers have already shuttered a General Motors plant at Shreveport in Louisiana because of a parts shortage. Toyota, meanwhile, has curtailed overtime at its 13 vehicle and engine plants in North America, the company said.

In January 2011, Japan's automobile output totalled 706,107 units, of which 51.7% or 365,288 units were exported, based on statistics from the Japan Automobile Manufacturers Association.

The automotive industry is an important pillar of demand for petrochemicals. An automobile is estimated to use up an average $2,700 (€1,890) worth of chemicals, according to the American Chemistry Council.

($1 = €0.70)

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections
Please click here to read the latest news on the Japan disaster

By: Nurluqman Suratman

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly