2012 Honda FIT Shuttle Late Honda car debut turns into hot event

Not for us in North America.... yet....
Honda headquarters is sweltering, executives are without ties and reporters are fanning themselves in a scene illustrative of the nation's struggle to conserve electricity since March 11, when the massive earthquake and tsunami sent the Fukushima No. 1 nuclear plant into meltdown.

The scene unfolded as Honda Motor Co. launched the Fit Shuttle station wagon, including hybrid versions, for the domestic market Thursday — three months later than planned — another sign of the disaster's widespread impact.

The quake and tsunami destroyed Honda's parts suppliers, dealers and design facility in the Tohoku region.

Still, President Takanobu Ito was relieved the company had come this far.

"It was a real tough three months for us," he told reporters, wearing a casual beige jacket and no tie instead of his usual dark suits.

Cool Biz, the annual practice of allowing less formal attire to be worn in the office during the summer, is finally being embraced in a big way in the name of saving power. Now dubbed Super Cool Biz, some employees are even being encouraged to wear Aloha shirts and shorts.

Although no Honda executives were seen in shorts and their shirts were relatively staid, the nuclear crisis hung like a cloud over the event.

Tokyo-based Honda's invitation to the product launch — one of the first since March 11 — had warned that thermostats will be set at 28 degrees and that executives would be dressed in Cool Biz attire.

In addition to the Fukushima No. 1 crisis, which is expected to take years to resolve, another power plant was shut down months later over safety fears, causing the government to pressure companies and consumers to cut back on power use.

Automakers, a pillar of the economy, are under great pressure to cut power use 15 percent.
Autoworkers are producing cars on weekends and will instead take Thursdays and Fridays off for the next three months starting in July to reduce the load on power companies and avoid blackouts during peak demand periods.

Honda has said vehicle production in Japan will return to predisaster levels by the end of this month, and global production in August or September.

All orders for the Fit Shuttle will be delivered in two months' time, said Sho Minekawa, the executive in charge of Japan sales. There are no plans to offer the model overseas so far.

"We are finally able to introduce this product," he said. "We apologize to all those who have been waiting."

The Fit Shuttle, which comes as a hybrid (starting at ¥1.81 million) and with a gasoline engine (starting at ¥1.61 million), delivers the same mileage as the smaller Fit hatchback, according to Honda.

The hybrid version delivers 30 km per liter, or about 70 mpg, under Japanese test conditions, it said.

Honda is expecting its profit for the fiscal year through next March to plunge 63.5 percent to ¥195 billion from the previous year because of parts shortages and other disaster woes.

The maker of the Civic sedan and Odyssey minivan was battered by the cost of fixing damaged property and equipment, higher raw material costs, the strong yen and research expenses related to future products, such as environmental technology. Honda's global vehicle sales for the current fiscal year are projected to drop 6 percent on year to 3.3 million vehicles.

Honda to hire 1,000 temps
Kyodo
Honda Motor Co. will hire about 1,000 term employees at domestic plants, including in Saitama and Mie prefectures, during the second half of fiscal 2011 to cope with increased production expected from October to March, company sources said Thursday.

Honda is taking the measure because production is recovering from the March 11 catastrophe more quickly than anticipated and is expected to return to near normal by late June, they said.

The automaker will therefore withdraw its earlier plan set in April to gradually reduce the approximately 600 term employees at the plant in Saitama to zero by the end of September.

Honda will renew contracts of term employees if they want to do so, even for those whose employment contracts have already expired, they said.

Source;
http://search.japantimes.co.jp/cgi-bin/nb20110617a1.html

UPDATE: Honda Pres: Yen Remains Big Concern As Seeks To Restore Ops

By Yoshio Takahashi
Of DOW JONES NEWSWIRES

TOKYO (Dow Jones)--Honda Motor Co.'s (7267.TO) chief executive voiced concern about the yen's strength Thursday, noting its current position could offset the Japanese auto maker's attempt to recover after the March 11 earthquake and tsunami.

"My feeling is that (the business) situation is tough, especially foreign exchange. I hope that the (unfavorable yen level) will change," Takanobu Ito, president and chief executive of the car maker, said at a press conference for the launch of the auto maker's Fit Shuttle hybrid wagon.

Earlier this week Honda said that it expects its net profit for the current fiscal year through March to drop 63% on the back of the yen's strength and reduced output resulting from a parts shortage in the wake of the disaster.

Honda expects a scarcity of some key parts from suppliers stricken by the disaster to reduce its global sales by 6% to 3.3 million vehicles this fiscal year.

In a bid to push sales during harsh times, Honda rolled out the Fit Shuttle hybrid wagon in Japan three month behind the initial schedule due to the earthquake.

The new hybrid with a starting price of Y1.81 million was developed based on its Fit company hybrid and can run 30 kilometers on a liter of gasoline.

This price is lower than the lowest price of the Prius Alpha minivan hybrid launched last month by Toyota of Y2.35 million.

Toyota's new hybrid was also introduced in Japan with a delay due to the disaster.

Honda said it has received orders for 7,000 Fit Shuttle hybrids, well above the model's monthly sales target of 4,000 units.

But Toyota sees much stronger demand for its newest hybrid, saying Tuesday that it has received 52,000 orders in Japan for the new minivan version of the Prius hybrid one month after its launch. The number far outstrips the company's 3,000 monthly sales target for the Prius Alpha.

Source;
http://online.wsj.com/article/BT-CO-20110616-702125.html

Post-quake Honda says it now has lots of Fits, Insights for dealers

Honda offered a terrific sign this week that it is finally getting back on its feet in the U.S. after the March earthquake and tsunami that drastically slashed production.

It is now telling dealers that they can resume ordering two of the most in-demand models -- the small Honda Fit and the hybrid Insight, Automotive News reports.

The two models, both made in Japan, have been among the most in-demand as gas rose to an average of nearly $4 a gallon. The Fit is the smallest car that Honda sells in the U.S. and comes recommended by Consumer Reports. The Insight is the brand's underrated hybrid, a competitor to Toyota's Prius.

"Honda's manufacturing operations in Japan are returning to nearly normalized levels by the end of summer," said John Mendel, executive vice president of Honda's U.S. sales operation in a memo to Honda dealers. Adding back Fit and Insight "represents a major improvement from the recovery timetable we provided you last month."

Honda stopped orders on the models after the earthquake. Honda didn't incur major damange to its factories in Japan, but it has been badly impacted by the shortage of parts that has hampered other automakers, including those in the U.S.

In fact, Mendel is downright bullish. Noting that other models like the Pilot SUV, Odyssey minivan and CR-V small crossover are coming back to normal production levels, he implored dealers, "it is imperative that you keep your foot on the sales pedal."

It won't be easy: Sales fell 22% in May compared with a year ago, the News notes.

Source;
http://content.usatoday.com/communities/driveon/post/2011/06/post-quake-honda-says-now-lots-of-fits-insights-for-dealers/1

Honda plans to bring its Japanese assembly plants back to normal output by summer

Honda Motor Co. is seeking to recover from the Japan disaster months earlier than forecasted. It expects that its assembly plants in Japan will be able to resume normal production by summer. Spokesman Keitaro Yamamoto said Honda’s factories in Sayama and Suzuka factories, the car’s only assembly plants in Japan, are expected to get back to pre-earthquake production levels by August. Honda had previously announced that global production will be restored by the end of the year. Honda had been significantly affected by the March 11 earthquake and tsunami in Japan that had resulted to disruptions in the supply chain and to idled plants.

But it’s likely that the global operations will normalize earlier with the progress in the country’s recovery, according to Autonews. Honda anticipates that the r&d center’s engineers, who were out of work after the disaster struck, will go back to the facility by the middle of June. The earthquake claimed one death and led to several injuries when it caused the ceiling at Honda’s body design facility to crash down. Last March, Honda put a thousand of its r&d workers (about 10% of the center’s total workforce) to continue their work at its other buildings in the site or at its other facilities in Japan while repairs are ongoing.

Yamamoto said that suppliers are exceeding expectations and are restoring output earlier. That is why automakers are also able to resume normal production earlier too. Honda’s improved outlook was revealed only days after it said that U.S. production will go back to normal this August for its entire lineup except the recently redesigned Civic. Honda has announced that a second shift will be put up later in 2011 at its Civic plant in Indiana to help make up for the production losses.

Source;
http://www.4wheelsnews.com/honda-plans-to-bring-its-japanese-assembly-plants-back-to-normal-output-by/

Policies say a lot about Honda

It is very good news that Honda expects all its North American operations to be back to full speed by August and that includes its Lincoln plant where three of its most popular vehicles are assembled.

The March earthquake and tsunami in Japan severely hampered Honda’s supply chain and ended up costing the giant automaker months of production as it faced difficult and at times insurmountable obstacles to getting supplies from Japan to North America.

Without those supplies, cars could not be built.

As time passed, the supply chain opened up a bit, and then a little more. But not too long ago Honda officials (along with other Japanese automakers) were expecting a late fall date for full production to resume.

Last week, however, the company announced it wouldn’t take that long.“Honda will increase production volume at its North America automobile plants to a rate of 100 percent original production plan in August,” a company press release announced.

Honda’s employees in Lincoln met the news with enthusiasm.

“Today we announced to our associates in plant-wide meetings that we are planning to accelerate recovery of our production. …” said Mark Morrison, a company spokesman. “When we announced that the Odyssey and Pilot would reach 100 percent of their original production plan in August, our associates greeted the news with great applause,” he said.

That kind of reaction is what you would expect from Honda employees. The 4,000 people who work in the local plant are intensely loyal and, based on the plant’s expansion since opening, also are very productive.

That loyalty and productivity have been rewarded with a unique approach to the forced slowdown in production. Rather than lay off workers, Honda allowed them to work on maintenance chores, or to take earned vacation time to keep their paychecks coming. And after the April 27 tornadoes ripped through our area, Honda allowed its employees to take two days per week to volunteer at cleanup activities while getting paid as though they were at work.

Those policies say a lot about Honda and the kind of company it is. And they say a lot about Honda’s employees and the kind of people they are.

Honda made it through this parts crisis without laying off a single employee in their North American plants, the company said. Now that they are ready to ramp up production again, those employees are available and their morale should be high, since no one had to do with a reduced paycheck during the difficult times.

The Japanese automaker obviously enjoys great economic strength to be able to weather such a crisis without cutting employee paychecks. We commend Honda for its approach, we continue to wish the company a long and prosperous future in Lincoln and the rest of its North America plants.

Source: The Daily Home - Policies say a lot about Honda

WSJ: Honda To Resume Full North American Auto Production In August

By Mike Ramsey
Of THE WALL STREET JOURNAL

DAYTON, Ohio (Dow Jones)--Honda Motor Co. (HMC, 7267.TO) will return its North American auto production to normal levels for all but one vehicle in August, faster than the company expected, the company said in a statement Thursday.

Honda has been running its plants at around 50% of their normal volume since April because of limited supplies of critical parts. Honda, Toyota Motor Corp. (TM, 7203.TO) and Nissan Motor Co. (NSANY, 7201.TO) have all limited their production this year because of the massive March 11 earthquake that damaged dozens of parts suppliers, particularly electronics makers.

Unfortunately for Honda, the lone car built in North America that won't return to full production in August is the redesigned Civic. Production of the vehicle will remain at 50% of projected volume because of limited supplies of parts and return to normal sometime in the fall, the company said. The Civic is one of Honda's best-selling models and the redesigned model was expected to help drive sales this year, reversing a market-share decline.

"The light at the end of the tunnel is glowing brighter for us, represented by this significant improvement in our production situation," said John Mendel, executive vice president of American Honda Motor Co., in the statement.

Honda, with more production in North America than Toyota or Nissan, has been the slowest to return its plants to higher volume. Nissan's U.S. production missed only a few days and Toyota is ramping back up most of its plants in North America next month.

Low inventories of key vehicles, combined with few incentives from Honda and maybe the perception that cars aren't available, are expected to drag down Honda's sales results in May. TrueCar.com, a consumer research and vehicle pricing website, predicts Honda's May sales will decline 26%, the most of any major manufacturer.

Honda's Mendel last week sent a letter to dealers to encourage then to push for sales harder and to say that supplies wouldn't run out because sales results were disappointing at that point in the month.

Source;
http://online.wsj.com/article/BT-CO-20110526-707691.html

Honda Gives Assurances to U.S. Dealers

By MIKE RAMSEY
DETROIT—Honda Motor Co. told its U.S. dealers Friday that July vehicle deliveries would increase by 11% from June levels and accelerate in August as the auto maker ramps up production after the March 11 earthquake in Japan.

American Honda Executive Vice President John Mendel said in a memo that its sales continued to "run at a relatively soft pace" despite what the company considers decent inventory levels, albeit lower than year-earlier levels.

"Many of you have indicated that it is due in large part to concerns for inventory going forward," Mr. Mendel said.

Honda follows Nissan Motor Co. in efforts to encourage its dealers to continue driving deals to gain customers despite a murky outlook for vehicle inventories this summer. Both auto makers and Toyota Motor Corp. had to stop production in Japan for several weeks following the earthquake, and all continue to face shortages of electronic components, LCD screens and rubber.

U.S. sales for Honda rose 10% last month compared to 18% for the overall industry.

"It's interesting to note that although our total inventory is down versus May 2010, we have more CR-Vs, Pilots and Fits in dealer inventory now than we did a year ago," Mr. Mendel said.

"With this level of inventory, coupled with competitive incentives focused on vehicles with sufficient availability, you all need to continue to push hard on the sales front."

Last week, Nissan asked dealers to be more aggressive and go after Toyota and Honda, which it deemed vulnerable.

Source;
http://online.wsj.com/article/SB10001424052748704816604576335061787279604.html?mod=googlenews_wsj

Honda says parts supply recovery picking up speed

May 17 (Reuters) - Honda Motor is seeing a speeding up in the recovery of parts supplies, which will be key to bringing forward its timing for a return to normal production after a March earthquake and tsunami in northeastern Japan disrupted supply chains, the automaker's chief financial officer said on Tuesday.

Honda Chief Financial Officer Fumihiko Ike also told a small group of reporters that the company plans to announce its earnings forecast for the current fiscal year before its shareholders' meeting, which is scheduled for June 23. (Reporting by Kentaro Sugiyama; Writing by Junko Fujita; Editing by Edmund Klamann)

Source;
http://www.reuters.com/article/2011/05/17/honda-production-idUST9E7GA01I20110517

Japan nuclear plant shutdown adds new risk to economy

By Stanley White and Chang-Ran Kim
TOKYO Mon May 9, 2011 1:27pm BST

(Reuters) - The surprise closure of another Japanese nuclear plant, this time at the power supplier to the heart of the auto industry, threatens to dampen consumer sentiment and will provide car makers with yet another reason to produce fewer cars in Japan.

Chubu Electric Power (9502.T) agreed on Monday to close its Hamaoka plant in central Japan, raising concerns over the steady supply of power to its region, which is home to Toyota Motor Corp (7203.T) and other major manufacturers.

The shutdown was requested by the government, which singled out Hamaoka as particularly vulnerable to a major earthquake and tsunami, after the 9.0-magnitude quake on March 11 triggered a nuclear crisis in the northeast.

Output disruptions may not be large enough to delay the economic recovery nationwide because Chubu is taking steps to meet peak summer demand by boosting thermal energy and securing electricity from another utility in western Japan.

But in the longer run the lack of clarity about how the government's energy policy might change following the March 11 disaster could tempt Japanese manufacturers to move more production overseas and discourage private consumption.

"We can rely on thermal power in the short term, but this raises costs and emissions," said Yasuo Yamamoto, senior economist at Mizuho Research Institute.

"In the future, we're not sure what the government wants to do. The longer that uncertainty about the power supply continues, the more companies will start thinking about manufacturing overseas."

The Hamaoka plant, located about 200 km (120 miles) southwest of Tokyo, accounts for about 15 percent of its electricity output. Chubu in turn provides power to half of the 18 plants that make Toyota's vehicles in Japan, and all four of Suzuki Motor Corp's (7269.T) domestic car and motorcycle factories.

The coverage area also includes other auto plants including those of Honda Motor Co (7267.T) and Mitsubishi Motors Corp (7211.T), but Toyota is most vulnerable given its heavy ratio of cars made domestically.

Toyota and Honda have been forced to operate at about half the levels planned before March 11 due to the shortage of components. They have forecast a return to normal production levels by the end of this year.

The Chubu region also includes a concentration of manufacturers in the flat panel display and semiconductor industries, such as Sharp Corp's (6753.T) Kameyama LCD factory and Toshiba Corp's (6502.T) Yokkaichi semiconductor plant.

Toyota, Suzuki and other car makers said they had no comment on how they would cope before Chubu Electric explains how it plans to make up for the power shortfall.

Replacing nuclear power with that produced by conventional thermal plants could increase electricity costs, but those make up only a small portion of automakers' costs, argues Nomura Securities auto analyst Masataka Kunugimoto.

What matters more, analysts say, is doubts about reliability of power supplies that could give automakers another reason -- in addition to a strong yen and cheaper labor abroad-- to shrink production volumes in Japan.

"This raises a question of how you're going to split your domestic and overseas production," said Koji Endo, senior analyst at Advanced Research Japan.

Toyota and Nissan have publicly committed to a minimum level of domestic production to keep Japan's tradition of manufacturing alive, but questions surrounding energy policy could force a rethink, Endo said.

The shutdown's impact on households could be more direct and immediate. Power cuts or a rise in electricity bills could force households served by Chubu Electric to save more energy or spend less on everything else, damaging sentiment already depressed by radiation leaks from the Fukushima plant in the tsunami-ravaged northeast.

Private consumption accounts for more than 50 percent of gross domestic product and Japan's limping economy badly needs consumer spending to hold up.

"Chubu Electric is likely to come up with a campaign to save power, which could depress private consumption," said Takuji Okubo, chief economist at Societe Generale Securities.

"Companies should be able to cope, but weak consumer sentiment could become a national phenomenon."

Source;
http://www.autospies.com/news/Closure-Of-Another-Power-Plant-May-Force-Auto-Production-Out-Of-Japan-63740/

Honda to Limit Orders of Japan-Built Cars, including the Civic

Due to the Japan earthquake and tsunami disaster, shortage of new vehicles possible until end of year
BY: Kristin Craik

Honda announced today the company’s overall production volume will remain significantly reduced throughout the summer months. Although most of Honda’s vehicles are made in North America, overall production is expected to normalize sometime near the end of 2011.

This move comes as a reaction to service interruptions at Honda’s Japanese plants, which were severely affected by the Japan earthquake and tsunami disaster. This is detrimental to vehicle production because of a few critical parts supplied from Japan. Most of Honda’s Japan-based parts suppliers have resumed production and Honda is working hard with a few suppliers that are not yet back to production capacity.

Honda has a few popular car models affected by this situation. The new 2012 Honda Civic will have significantly reduced levels throughout the summer months. The fall launch of the 2012 CR-V will be delayed at least by one month. Only a limited amount of Japan-built vehicles will be available for the remainder of the year. Those models speculated to have limited availability are the Honda Fit, CR-Z, Civic Hybrid, Acura TSX, Acura TSX Wagon, and the Acura TSX RL.

Additionally, due to a shortage in supply of Japan-sourced paint pigment, certain colors of vehicles will also be in short supply.

Source;
http://www.businessreviewcanada.ca/sectors/automotive/honda-limit-orders-japan-built-cars-including-civic

WSJ: Honda Motor:Expect Domestic Plants To Return To Normal By Year-End

TOKYO (Dow Jones)--Honda Motor Co. (7267.TO) said Monday that it expects its domestic auto plants to return to production levels planned before the March 11 earthquake by the end of the year.

The car maker's domestic plants will remain at half the initially planned volume until the end of June, though production levels after July are still unclear and will depend on parts supplies. The outlook for overseas factories also remains uncertain, Honda said.

Plants in North America, the U.K., Turkey and the Philippines are operating at 50% of their initially planned levels, while the company has also reduced output volumes at factories in China and Thailand, the car maker said.

The quake and tsunami disrupted the company's parts supply chain and a parts shortage has kept production at reduced levels.

Toyota Motor Corp. (7203.TO) said last Friday that it doesn't expect its domestic and overseas factories to be back to normal until November at the earliest.

Source;
http://online.wsj.com/article/BT-CO-20110424-702114.html

Honda altering production schedule in Alliston

Reducation expected to continue until May 6
By Marg. Bruineman, the Barrie Examiner

Reduced daily production levels at Honda Canada's Alliston facility has been extended as a result of a parts shortage from the earthquake-ravaged Japan.

"Production adjustments continue until May 6, although adjustments vary," said Honda's Lori Van Valkenburg in Alliston. "All associates have the opportunity to work their entire shift and work is being provided for them."

They also have the option of taking vacation time or time without no pay with no penalty.
On Monday, she said, associates worked six hours in production in the weld department in Plant 2.

But the expectations are that everything will return to normal after that.

"We anticipate that additional production adjustments will continue after that date," the company announced in a press statement.

The car builder has reduced the number of cars it builds as a result of last month's devastating earthquake and tsunami in Japan. The natural disaster, which has claimed about 14,000 lives, impacted both the car builder and its suppliers in Japan.

Most of the cars supplied to the North American market are built in North America. And a majority of the parts are sourced here.

About 4,200 people work at Honda Canada's Alliston facility, which has two car-building plants and an engine plant.

The bulk of production are Honda Civics (sedan, coupe, and Si sedan & coupe) along with the Acura MDX, Acura ZDX, Acura CSX.

But some of the parts are shipped in from Japan, where several companies are struggling to get back to production. As a result, there's limited supply of parts available for car building in Alliston.

Honda's car building plants in Japan all resumed limited production last week, operating at about 50% capacity.

Source;
http://www.thebarrieexaminer.com/ArticleDisplay.aspx?e=3080274

Auto Makers Pull, Rethink New Car Launches

After the devastating earthquake and tsunami of March 11, Japan’s auto makers aren’t just facing a struggle to scramble for parts from troubled suppliers to try to get their factories working again. They’re also having to retool their whole marketing strategies.

Honda Motor Co. had been scheduled to hold a press conference on March 17 for what would have been the world’s first hybrid wagon, the Fit Shuttle. Instead, Honda was obliged to cancel the event and delay the domestic launch, originally in the diary for the following day. Meanwhile Toyota Motor Corp. has had to postpone the release of the wagon and minivan versions of the Prius hybrid – now Japan’s biggest-selling car ever: that was on the slate for late April in Japan.

While others like Mazda Motor Corp. and Mitsubishi Motors Corp., both with plans to roll out new vehicles later this year, say they’re not considering delaying launches at the moment, the postponement of new Toyota and Honda hybrid models come as demand for fuel-efficient vehicles is likely growing. The average gasoline price in the disaster-troubled country hit Y151.2 per liter on March 22, the highest level since October 2008, and remains around that level, according to the country’s Oil Information Center. As well as price, availability is a concern for people in quake-hit northern Japan, with fewer public transport options than big cities like Tokyo: many gasoline stations in the area remain shut after the disaster.

Spokeswomen at Honda and Toyota said that they have yet to decide on new launch schedules. Even if customers’ appetite for fuel-efficient vehicles is on the rise, they won’t be able to meet higher demand with vehicle production ability dented by the parts shortage, they said. Crimped by the continued vehicle output stoppage, the country’s auto sales sank 37% in March, the biggest drop in 37 years.

Perhaps no surprise, then, that Toyota, Honda, Nissan Motor Co. and other local auto makers are holding off on the aggressive sales promotions in TV, magazine, newspaper ads, or special sales campaigns at dealerships, that typically surround new launches.

Still, auto makers are responding to demand for gas-sipping cars. Toyota restarted production of three hybrid models from March 28 in Japan, including the Prius, and Honda has said that it will run all its domestic factories from April 11, possibly resuming production of all kinds of its vehicles including the Insight and Fit hybrid cars.

Source;

http://blogs.wsj.com/japanrealtime/2011/04/07/auto-makers-pull-rethink-new-car-launches/

Honda Canada Ordering Delays

Well, the fallout from Japan's disaster is official, incoming units have been delayed indefinitely. We normally have about 9-12 pages of incoming units and we are now down to about 2 pages of stock.

Incoming 2012 Honda Civic's have been taken right out, so I am not sure if Honda will be delaying the launch date of April 22nd, 2011, although I do know that some dealerships in the US have

CRV's are about the only thing that I think dealerships with have in adequate stock.

Source;
Honda Canada

Nissan, Honda Better Positioned Than Toyota After Japan Quake

Moody’s says that this month’s triple disaster of earthquake, tsunami, and nuclear crisis in Japan will not result in wholesale rating changes for Japanese automakers, but its aftermath will weaken the issuers’ operations and financial performance at least through the first half of fiscal-year 2011, ending next March.

Tadashi Usui, the lead author of the report and a Moody’s vice president in Tokyo, says, “To a large extent, the financial health of our rated Japanese automakers before the disaster determines their vulnerability: Toyota (TM) and Yamaha were less well positioned in their ratings and thus are more vulnerable, Nissan (NSANY.PK) and Honda (HMC) are better positioned, and Isuzu is in the middle of the pack.”

Usui adds, “For example, Toyota had been trying to recover after widespread product recalls in 2010; whereas, Nissan’s performance had been improving and was on review for possible upgrade.”

Usui says, “None of these companies have assembly plants that experienced lasting direct damage from the earthquake or tsunami.” He adds, “However, the indirect effects of power shortages and rolling-black outs, disruptions to supply chains, and staffing issues represent a more serious problem.”

A contributor to the report, Michael Mulvaney, a managing director for Moody’s in New York, adds adds, “Problems at geographically dispersed second- and third-tier suppliers may be severe, and for critical parts, the added costs of finding alternative sources of supply could shave 1% to 2% from automakers’ margins.”

Mulvaney says, “We expect Japanese automakers’ full-year revenues for the coming fiscal year to at best show low single-digit growth as overseas markets help to offset weakness in the domestic Japanese market in the first half of the year.”

In a separate report Moody’s sees no material threat tothe ratings of Europe-based automotive suppliers, which have limited direct exposure to the consequences of the disaster:

However, we believe that they will feel ripple effects in the global supply chain as original equipment manufacturers (OEMs) reduce output in Europe and North America. Although OEMs and suppliers worldwide are exploring alternatives to supply shortages caused in Japan, we believe it will take some time to realign the supply chain where necessary.

Once this has happened, we expect at least some of the lost production volumes to be recovered. We expect the disaster to negatively impact revenue and earnings, primarily in Q2 2011. In addition, halts in OEM production might impact working capital consumption. However, we estimate that the impact on the credit metrics of Europe-based automotive suppliers will only be temporary.

Source;
http://seekingalpha.com/article/261141-nissan-honda-better-positioned-than-toyota-after-japan-quake

Honda to cut output at U.S., Canadian auto plants

DETROIT (Reuters) - Honda Motor Co (7267.T: Quote) will cut production at its U.S. and Canadian automotive plants starting Wednesday due to disruptions in the supply of auto parts after the Japanese earthquake more than two weeks ago. The temporary changes to the production schedule will vary plant by plant based on the availability of certain parts, Honda spokesman Jeffrey Smith said. He declined to detail the changes in production at individual plants. The automaker operates plants in Canada and three states in the United States. Honda relies on North American suppliers for more than 80 percent of the parts it uses to build vehicles in North America. Honda has suspended production at its two plants in Japan until at least April 3. Smith said most of the company's Japan-based parts suppliers have resumed production or are ready to start. "This is a very fluid situation," Smith said. He added: "We are working with a few suppliers who have yet to resume production to reestablish operations and at the same time, we are evaluating additional sources for some parts." The March 11 earthquake, tsunami and nuclear crisis in northern Japan have left the global auto industry struggling to manage a ripple effect across its production and supply base. Earlier Tuesday, Toyota Motor Corp (TM.N: Quote)(7203.T: Quote) told its dealers to curtail orders of certain replacement parts to ensure an adequate supply. Source; http://ca.reuters.com/article/businessNews/idCATRE72S74M20110329

The Most Devastating Footage of Japans Tsunami

Honda puts Honda FIT Shuttle intro on hold

Not for the North American market....
The devastating earthquake and its aftermath in Japan have forced Honda to postpone the market launch of its new Fit Shuttle. The introduction of the car in Japan was scheduled to take place this month. Honda said it has not yet decided on a new release date and that the company will follow up with an announcement with more details soon.

The new Fit Shuttle is approximately 510mm longer than the hatchback, which is also known as the Jazz in Europe and other international markets. In Japan, it will be offered with a similar engine lineup to the hatchback model including a conventional 1.5-liter four-cylinder gasoline engine and a hybrid variant featuring a 1.3-liter gasoline unit and a 10 KW electric motor.

Suggested retail prices in Japan will start from 1.61 million Yen (about US$13,900) for the gasoline engine only model and from 1.81 million Yen (US$15,800) for the hybrid variant.

Source;

http://carscoop.blogspot.com/2011/03/honda-postpones-launch-of-fit-shuttle.html

Report: Japan will affect all automakers

Alisa Priddle / The Detroit News

Every major automaker will be affected by the disaster in Japan by mid-to-late April, according to a report released today by automotive forecasters IHS Global Insight of Northville.
"It is not a matter of if, but when," said Michael Robinet, director of Automotive Forecast, in an analysis of the impact on the auto industry of the earthquake and subsequent tsunami in northern Japan. The damage halted domestic vehicle production and affected the supply chain, which is causing disruptions at plants around the world that rely on Japanese-sourced parts.

The IHS analysis concluded that light vehicle output in Japan is expected to be impacted by about 335,000 vehicles by Friday and that figure could be in the 450,000 range by the end of March. That is based on a loss of about 37,000 cars and trucks a day if all Japanese assembly plants are affected.

Toyota Motor Corp. and Nissan Motor Co. are gingerly resuming production of components for overseas plants and hope to restart vehicle assembly plans in Japan later this week.

Some of the most fuel-efficient vehicles offered by Japanese automakers are only built in Japan. As supplies diminish of vehicles such as the Toyota Prius hybrid, average transaction prices for some models are starting to creep up and incentives are likely to evaporate, said Aaron Bragman, IHS automotive analyst, in a separate report also released today.

TrueCar.com says prices of Japanese models in the U.S. are rising already, with the Prius up $169 per vehicle, on average, in the past week in response to the supply crunch, Bragman notes.

"If the supply of imported Japanese fuel-efficient vehicles cannot be restored quickly, an opportunity may arise for well-placed competitors to start stealing U.S. market share from Japanese automakers," Bragman said.

Among the well-situated is Ford Motor Co., which has made fuel-efficiency a priority and has a number of new models that get 40 miles per gallon. General Motors Co. also has new small vehicles as well as the Chevrolet Volt plug-in hybrid. Hyundai Motor Co. also has a lineup of strong contenders.

"The initial estimates are that this could be a protracted shutdown of the Japanese industry," Bragman said. In addition to issues with vehicle production and parts supply, there are rolling blackouts because of damage to the electric power grid and a nuclear disaster in addition to other infrastructure damage as well as port and shipping issues and the loss of workers.

Robinet said it could take seven weeks of full production, with overtime, at a facility to make up for one week of lost production.

But competitors will only be able to fill any voids created by a shortage of Japanese models if they have the parts to keep their own assembly lines running as well.

So far, lost volume outside Japan is only about 10,000 vehicles, according to Robinet. That includes General Motors Co.'s truck plant in Shreveport, La., which suspended work because of parts shortages.

The Japanese-made components most affected include semi-conductors, integrated circuits, sensors and LCD displays, but IHS said shortages also may be felt in resins and synthetic rubber in the next few weeks. And the quake zone is home to powertrain parts such as gears and clutch components. Specialty materials such as silicon and certain types of glass and metals could also run short, Robinet forecasts.

Source;
http://www.detnews.com/article/20110321/AUTO01/103210409/1020/Report--Japan-will-affect-all-automakers

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