Japan auto output hit as quake disrupts supplier


An employee of Toyota Motor Corp. inspects a Lexus vehicle after completion of assembly at the Tahara plant in Tahara, central Japan June 28, 2007. At least four Japanese automakers including Toyota Motor Corp said on Wednesday they would suspend production after an earthquake hit the factories of a major parts supplier. (REUTERS/Kiyoshi Ota)


TOKYO (Reuters) - At least four Japanese automakers including Toyota Motor Corp <7203.T> said on Wednesday they would suspend production after an earthquake hit the factories of a major parts supplier.

The quake on Monday in northwestern Japan, which killed nine people, damaged the factories of piston ring maker Riken Corp
<6462.T>.
Toyota, Japan's largest automaker, said it would suspend output at all 12 of its directly owned domestic car and parts factories for half a day on Thursday and all day on Friday due to difficulties in procuring supply from Riken.
A spokeswoman said Toyota did not know how many vehicles would be affected.
Suzuki Motor Corp <7269.T>, Mitsubishi Motors Corp. <7211.T> and Fuji Heavy Industries Ltd <7270.T>. <7270.T>, the maker of Subaru cars, also said they would halt production at some factories.
Honda Motor Co. <7267.T> said some of its car and motorcycle production could also be stopped next week.
Riken's shares fell 1.4 percent on Wednesday to 616 yen, taking its losses since the quake to 5.5 percent. The auto subindex fell 1.1 percent on Wednesday.
"There's probably going to be some impact," Honda Chief Executive Takeo Fukui told a news conference on Wednesday. "We're still investigating and don't know how big the impact will be."
Suzuki, which makes compact cars and motorcycles, will suspend production at five domestic factories, including two car assembly plants, for three days starting on Thursday. That would lead to a production loss of about 10,000 cars and 5,000 motorcycles, a spokesman said.
The automaker will assess later in the week whether production can resume next Monday, he added.
MAKING UP FOR IT LATER
Tokyo-based Mitsubishi Motors said it would suspend production for a few days at three assembly plants. It did not specify the scale of lost production but said it would make up for it using holidays at a later date.
Subaru-brand maker Fuji Heavy will halt production on its mini-vehicle line from Thursday's second shift until Saturday, the equivalent of 1,500 units.
Monday and Tuesday are planned company holidays, and while Fuji Heavy wants to resume production from Wednesday, it will make a decision later this week, spokesman Kenta Matsumoto said.
Other major automakers including Nissan Motor Co. <7201.T> and Mazda Motor Corp. <7261.T> said they were still making checks with Riken.
Credit Suisse auto analyst Koji Endo said he saw no cause for alarm.
"We have had these kinds of incidents over and over, whether it's a typhoon or fire or earthquake. It's not that significant," he said, adding he expected automakers would be able to make up for a one-week suspension in about three days of longer, intense production.
Another Honda executive said it may be possible to seek parts from another supplier but added it would take time to test them for compatibility and quality.
Teikoku Piston Ring Co. <6463.T>, another major maker of piston rings, said it had requests from several automakers to supply parts to partly make up for lost production at Riken.
A spokesman said the company had not made a decision yet on whether or how to meet those requests.
NOK Corp. <7240.T> and Nippon Piston Ring Co. <6461.T> said they were asked by several parts and automakers whether they could substitute as well, if the need arose.
Riken said it was unclear when production would resume at its plants. It has two piston ring plants and nine affiliated plants in and near Kashiwazaki, the city worst hit by Monday's quake.
The company said it had half of the domestic market for piston rings and around 70 percent of the market for seal rings, which prevent oil leaks in automatic transmissions and continuously variable transmissions.
Riken said it would take a few days to reposition equipment knocked around by the quake, after which it would need to undertake precision and quality checks. Gas and water supplies have not yet been restored.

HIROKO TABUCHI

Associated Press

July 18, 2007 at 12:12 PM EDT

TOKYO — Japanese auto makers, including No. 1 Toyota Motor Corp., called production halts Wednesday at factories in Japan because of quake damage at a major parts supplier.

The temporary closure of auto parts maker Riken Corp.'s plant at Kashiwazaki city, near the epicentre of Monday's magnitude 6.8 quake, has forced Toyota, Nissan Motor Co., Mitsubishi Motors Corp., Fuji Heavy Industries and Suzuki Motor Corp. to scale back production.

Toyota will stop production lines at a dozen factories centreed in central Aichi prefecture Thursday afternoon and all day Friday, said Toyota spokesman Paul Nolasco.

The company will assess the situation at Riken, supplier of key transmission and engine parts, before deciding whether to resume production on Monday, he said.

Nissan Motor Co. said Wednesday it was also halting some production lines at two factories on the main island of Honshu for at least two days starting Friday because of supply delays from Riken.

But Nissan expected to quickly make up for any delays, said spokesman Yuichi Nakagawa.

Fuji Heavy, maker of Subaru cars, said earlier Wednesday it would stop production of its five mini car models because it is uncertain when it will receive its next shipment of piston rings from Riken.

Mitsubishi Motors also said it was stopping assembly at three plants later in the week for several days because it is unable to procure enough parts from Riken.

The problems at Riken were also threatening production at Honda Motor Co., the automaker's president told public broadcaster NHK.

“If things don't get better today, we're going to stop, too,” Takeo Fukui said. “We are just able to hold out until the weekend,” he said.

In addition, Suzuki Motor Corp. will suspend operations at five plants for three days from Thursday, Kyodo News agency reported.

Riken, Japan's No.1 supplier of engine piston rings, said in a statement it was rushing to fix the damage at its Kashiwazaki plant and hoped to get the factory online as soon as possible.

Fears of production delays at Japan's auto makers drove share prices down in Tokyo on Wednesday.

Fuji Heavy shares fell 1.82 per cent to 592 yen on the Tokyo Stock Exchange. Honda shares fell 0.66 per cent to 4,490 yen.

Toyota lost 1.32 per cent to 7,460 yen, and Nissan Motor Co. lost 0.53 per cent to 1,313 yen.

Monday's quake, which killed 10 people and caused a slew of problems at a nuclear power plant, has wreaked havoc on other companies with factories in the region.