Auto industry to feel impact from Japan’s troubles

Auto industry to feel impact from Japan’s troubles
The full impact is a month or two away, but Berkshire County drivers seeking new vehicles or parts eventually may encounter shortages.

So far, the effects of the earthquake, tsunami and nuclear disaster on Japan’s manufacturers have been limited here, though supplies of computer chips and other components used in vehicles have been curtailed worldwide.

Some Ford models are now unavailable in black or red because the pigment for the metallic paint comes from Japan, said Gary Johnson, chairman of Johnson Dealerships Inc. Noting that many parts for Ford vehicles are manufactured there, including audio systems, Johnson said he has yet to be notified of any delays. His Nissan dealership also has been unaffected up to now.

At the Haddad Motor Group, which sells Toyotas, Subarus and Hyundais at separate facilities, owner George Haddad said he hadn’t heard of much disruption except for Internet-access shutdowns at Subaru caused by rolling power blackouts.

“We try to think positively,” he said. “It’s too soon to see an impact, and I’m hoping everything comes back online. In another month, we should feel something.”

He explained that monthly allocations of new vehicles trucked to dealers could be affected by disruptions in Japan.

His Hyundai line, manufactured in South Korea and the U.S., uses few if any parts or components from Japan, Haddad added.

Interrupted production of the Toyota Prius should catch up, he said, as factories are reopened in the coming days. He also reported an abundant supply of parts from pre-earthquake shipments.

At Bedard Bros. in Cheshire, where two of the seven lines are Japanese, Brian Bedard said he has a 60-day supply of Hondas and Suzukis on the lot.

He was advised late Monday that Honda expects a disruption of parts and supplies after April 1. He expects a possible impact locally in 30 days, but any effects on the monthly allocation of vehicles to dealerships are unlikely until June.

Jim Salvie, owner of the Berkshire Mazda franchise on Pittsfield’s East Street “auto mile,” predicted that temporary production shutdowns and parts shortages “won’t hurt us until June or July.”

Because parts and supplies are shipped by slow-moving boats, the real drop-off has yet to be felt by factories in the U.S., Europe and Asia, according to the Associated Press. That will come by the middle of April.

“This is the biggest impact ever in the history of the automobile industry,” said Koji Endo, managing director at Advanced Research Japan in Tokyo.

Much of Japan’s auto industry — the second largest supplier of cars in the world — remains idle. Few plants were seriously damaged by the quake, but with supplies of water and electricity disrupted, no one can say when factories will crank up. Some auto analysts predict it could be as late as this summer.

IHS Automotive expects that one-third of daily global automotive production will be cut because of supply chain disruptions. That means about 5 million vehicles worldwide won’t be built, out of the 72 million vehicles planned for production in 2011.

The uncertainly has suppliers, automakers and dealers nationwide scrambling. And it exposes the vulnerability of the world’s most complex supply chain, where 3,000 parts go into single car or truck. Each one of those parts is made up of hundreds of other pieces supplied by multiple companies. All it takes is one part to go missing or arrive late, and a vehicle can’t be built.

Auto-industry analysts think buyers will soon see higher prices and fewer choices.

Customers already face rising prices for models like Toyota’s Prius, which is made only in Japan. Fears of falling supply have some dealers nationwide driving a hard bargain with customers who want the fuel-efficient hybrid as gasoline prices rise. Recent discounts of 5 to 10 percent on that car are disappearing.

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