Shortages of automotive components quickly sparked concern over Honda’s UK facility production, following in the wake of the tragedy that struck Japan on March 11th, 2011.
Tokyo based automotive enterprises have suffered substantially due to the physical damage to parts suppliers in the north, where substantially higher earthquake related damage was (and is) felt. The World News reported that 400,000 cars were destroyed in the disaster.
As a result, Honda is predicting car shortages throughout the world, and numerous global automotive facilities will not have the components they need in order to operate at full production. Speculation was picked up as early as late March over the fate of the United Kingdom’s Swindon Honda facility. Numerous parts are supplied from Northern Europe, but many come from Japan.
In early April, Swindon announce that it would reduce its production by half, and as a result 22,500 fewer vehicles will built. The 3,000 workers are reported to remain on full pay, which seems amazing, but does tend to confirm the projection that Honda will get back into the swing of things in late May, and that the workers will basically make up the production by the end of the year. The Swindon facility is reported to produce over 600 vehicles each day.
I sincerely hope Japan can find the way to bring the country up on an even keel. They have in the past. Japan makes the finest cars in the world, and the shortage worldwide concerns me over the hopeful success of the country’s economy. Honda has taken a 30% drop in stock values, along with many other manufacturers. This compounded with the emergence of China’s production capabilities, Japan’s receding presence in the ‘gadget market’, and the energy issues resulting from the earthquake are creating substantially unfavorable economic speculations for Japan. Japan’s Nikkei Stock index fell 7% as a result.
Bloomberg quoted Yosjimasa Maruyama, a senior economist at Itochu Corp. in Tokyo, as predicting a recession and an economy that will contract for two more quarters after shrinking at the end of 2010. “We’re going to see big constraints on the supply side for a considerable while.”
Photograph courtesy of InAutoNews