Japan disaster: Carmakers may lose up to 600,000 vehicles

Global carmakers may lose production of 600,000 vehicles by the end of the month as the earthquake and tsunami in Japan halts assembly lines and work at suppliers including the maker of a paint pigment.

About 320,000 vehicles may have been lost worldwide as of March 24, and manufacturing at plants in North America may be affected when parts supplies start running out as soon as early April, said Michael Robinet, vice-president of Lexington, Massachusetts-based IHS Automotive.

"The next surge of shutdowns comes when the pipeline of parts that were already built dries up," Robinet said . "The rate of lost production will accelerate once North American plants join in."

Toyota, the world's largest carmaker, said it has lost output of 140,000 vehicles, and Honda has lost 46,600 cars and trucks and 5000 motorcycles. Mitsubishi's was lowered by 15,000. Ford hasn't lost any output, said Todd Nissen, a spokesman.

Honda, Japan's third-largest carmaker, said its production in North America may be disrupted from next month because quake damage is restricting parts supplies, Natsuno Asanuma, a spokeswoman said. Plants in Ohio, Alabama, Indiana, Canada and Mexico may be affected.

Mazda which had said its production was reduced by 31,000 cars, yesterday suspended US dealer orders for vehicles built at its two Japanese car factories.

Mazda plants in Hiroshima and Hofu have stopped production of new models, said Tim Gilman, a spokesman. Mazda makes the Mazda2, Mazda3, RX-8, MX-5, CX-7 and CX-9 in Japan, he said. While neither plant was damaged, access to parts and supplies has been crimped in the aftermath of the disasters, he said.

Nissan, General Motors, and other companies haven't provided details on their possible losses.

Merck KGaA has lost production of a metallic car paint pigment called Xirallic because its factory is 50km from the Fukushima Dai-Ichi nuclear power plant that was damaged, Gangolf Schrimpf, a spokesman said.

Chrysler is restricting dealers' orders on 10 vehicle colours because of the potential for a shortage. GM idled two compact-car plants in Europe and a pickup factory in Shreveport, Louisiana, amid parts shortages. GM sent electronics parts from Shreveport to a factory in Kansas City, Kansas, where the more-profitable Chevrolet Malibu and Buick LaCrosse sedans are made.

Production in Shreveport will resume today, Sherrie Childers Arb, a GM spokeswoman, said. US carmakers plants may experience sporadic shutdowns because they get so many parts from Japan, said Brian Johnson, an analyst with Barclays Capital in Chicago. While lost production would hurt earnings, lower inventory among Japanese carmakers may allow GM, Ford and Chrysler Group to gain market share or reduce price discounts, he said.

- BLOOMBERG

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