Fri, Apr 01, 2011 - Page 11 News List

Production stoppages in Japan hit Hotai Motor Co

QUAKE-INDUCED:Taiwan’s largest automobile retailer said it had a backlog of 2,300 cars as power shortages and assembly-line stoppages in Japan reduce supplies

By Kevin Chen  /  Staff Reporter, with Bloomberg and AFP, TOKYO

Hotai Motor Co (和泰汽車), Taiwan’s largest automobile retailer and distributor of Toyota and Lexus cars, said yesterday a delay in the production of automobiles and autoparts in Japan made it fail to meet demand for more than 2,000 vehicles last month.

Hotai said in a stock exchange filing that in the wake of Japan’s earthquake and tsunami last month, it had an order backlog for 2,300 cars in Taiwan, including 1,200 domestically assembled cars and 1,100 imported models.

Hotai Motor said the shortage of parts and electricity had forced Toyota Motor Corp to suspend up to 10 car production plants in Japan, while the shortage of imported autoparts also caused Taiwanese assembly partner Kuozui Motors Ltd (國瑞汽車) to cancel shifts last month.

“The company will continue negotiating with Toyota to make up the delayed orders,” Hotai said in the stock exchange statement.

Toyota has said it lost 140,000 units of production from March 14 to March 26, citing a shortage of electronic parts, rubber and plastics. The carmaker resumed production of three models at two factories on March 24, prioritizing hybrids including the Prius. All 18 plants in Japan were halted until then.

The Japanese company may delay the production of at least 500,000 vehicles in Japan and its operating profit could drop by at least ¥100 billion (US$1.2 billion) in the fiscal year ending yesterday and up to ¥200 billion in the next fiscal year, said Koji Endo, an auto analyst at Advanced Research Japan.

Any impact on production that spills overseas will further dampen earnings, he said.

Japanese manufacturers face a cut of about 15 percent in the power supply after the March 11 earthquake knocked out generators, curbing growth in the world’s third-largest economy.

The country’s manufacturing activity fell to its lowest in two years following the devastating earthquake and ensuing tsunami, a survey by a private research firm showed yesterday.

Hit by a sharp drop in output, the headline figure of financial data firm Markit’s manufacturing purchasing managers index fell to 46.4 last month, compared with 52.9 in February.

A figure above 50 indicates growth in activity, while a figure below that level indicates contraction.

The 6.5 percentage point fall was the steepest since the survey began in 2001.

The index is the first data taking into account conditions in the world’s third-largest economy after the quake, with many economists now forecasting a brief recession for Japan.

The survey, which Markit conducts with the Japan Materials Management Association, usually attracts an 80 percent response rate, but owing to the quake, the response rate was 67 percent last month, the UK-based firm said.

The survey took place between March 11 and March 25, Markit said.

Toyota, the world’s largest carmaker, might cooperate with other carmakers to devise a production rotation plan or conserve power in other ways, Toyota spokesman Masami Doi said.

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