As every car owner knows, it only takes one missing part to bring a car to a screeching halt. And the average car contains anywhere from 20,000 to 30,000 parts, many of which – even in American-made cars – come from Japan.
As disaster-hit in Japanese automotive manufacturers and parts suppliers struggle to resume operations, the global auto industry hasn’t quite come to a standstill, but it is suffering losses in production of hundreds of thousands of vehicles, amounting to billions of dollars.
The Japanese manufacturers in Thailand, Toyota, Honda, and Nissan are running production deficits daily. Each is losing about 6,000 units everyday. The halt in vehicle production will end up being quite costly for these three big Japanese manufacturers. Estimated to set each back more than $500 million a month.
Arguably Honda is the most badly hit automaker. It has had to stop production at it’s Ayutthaya plant since October 5th. Thailand is it’s largest production center outside of Japan. It has 40 suppliers and component factories close by producing a plethora of products, which include braking systems, suspension parts, engine components, and body parts. Honda produced 170,000 vehicles in Thailand in 2010. That includes the popular Accord and Civic sedans.
Ford is also having production issues. Ford makes it Fiesta in Thailand and will be stopping production from October 19-22. It hopes to work with supplies to begin regular production on October 25th. General Motors is not having production shortages in Thailand.
The majority of cars produced in Thailand last year were exported to markets from Australia to Europe and Mexico. Thailand accounts for roughly 7 percent of global vehicle production.
The floods are also having an affect on many other manufacturing that takes place in Thailand, not just for vehicles. Thailand is the second-biggest supplier of sugar, the largest exporter of rice. Most importantly they are the largest producer of hard-disk drives.
Apple for instance is having trouble getting components that are made in Thailand for its Mac computers. Western Digital, which makes hard-disks, said they cannot resume normal production for months. Canon and Nikon, which makes cameras and other electronics, have stopped production. Additionally Sony and Toshiba are unable to produce their respective electronics in Thailand as well.
The floods in Thailand have been extremely devastating, claiming more than 300 lives since July. They have spread across 61 of the country’s 77 provinces since late July and threaten to swamp parts of Bangkok. The Prime Minister of Thailand, Yingluck Shinawatra, wants residents of the capitol to move to higher ground.
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