The Truth About Cars » earthquake The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Wed, 23 Jul 2014 18:25:17 +0000 en-US hourly 1 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » earthquake Inside The Industry: An Unsung Hero Recalls How A Worldwide Crisis Was Averted Tue, 28 May 2013 15:46:29 +0000


After the March 11 monster earthquake and tsunami wiped out large parts of Japan, headlines focused on the near-meltdown of Fukushima. Recently, I learned that there was a strong likelihood of a worldwide economic meltdown, caused by a microchip factory 80 miles south of Fukushima. Here is the story of how the crisis was contained.

Renesas - EE Times 2

Inside the cleanroom on March 11

“I was already retired when the earthquake came,” remembers  a Toyota official who requested that his name is not published.  He is a seasoned production expert, one of the few alive who received personal training from Taiichi Ohno, the father of the Toyota production system. “I thought, let others handle the problem, but I was wrong.” He was recalled and asked to spearhead the Toyota part of the reconstruction effort.

When he received the call, Toyota’s Japanese production system itself was pretty much unharmed, however, there were 659 cases of suppliers in serious trouble. The most serious trouble was at a chipmaker named Renesas. Born from a merger of the semiconductor arms of NEC, Hitachi and Mitsubishi, Renesas supplied some 20 percent of the world’s automotive microcontroller market. About 70 percent of the production was sold to Japanese automakers, the remaining 30 percent went to US and European car companies.  Two weeks after the catastrophe, it was estimated that Renesas’ Naka plant, would not be operational until July.

Renesas - EE Times 1

Renesas office on March 11

That estimate was overly optimistic, I hear now.

“On April 1, we were told that basic repairs would take two and a half months,” the unnamed official remembers. “Start of mass production was scheduled for September. Which meant that first product to customer would have been shipped in January.“ 

While the eyes of the world were on the smoldering ruins of Fukushima, the damaged chip plant was about to trigger a worldwide disaster.  Renesas is one of the world’s leading manufacturers of flashable microcontrollers, the little brains that are inside of more products than we imagine. The chips could not be easily replaced, moving their production elsewhere would have taken nearly a year.  “Carmakers, PC-makers, cellphone makers, appliance makers, all were affected,” remembers the reactivated production veteran. “We were facing a worldwide economic crisis.”

Renesas asked for help, and its main customers sent help. Toyota, Honda, Nissan, Canon and many more sent their best people to Hitachinaka, a two hour drive north of Tokyo.  What they saw was disheartening.


Three days later, the power lines were back in place

“The building was more or less OK,” remembers the production expert. The insides of the cleanrooms were a jumble of equipment that had been thrown around by giant hands. Pipes  for concentrated acid were leaking, high voltage lines were even more dangerous. “And every two hours, there were aftershocks.”

Two and a half months of repair time sounded optimistic, but our man told an assembly of aghast Renesas engineers:  “I won’t listen how long it will take, we’ll finish the initial repair in 10 days.”


Complex machinery had to be repaired and aligned

Thousands of people, brought in from all of Japan, went to work, 24 hours a day. Three days later, the power lines were back in place, it would have been earlier “if the aftershocks would not have made us to do our work twice.” 150 specialty chemical pumps were disconnected, sent to their makers, and were back, rebuilt and as good as new, ten days after.


The before picture (left) was taken March 18; the after picture was taken April 11.

1,700 machines and pieces of equipment had to be repaired, reinstalled, aligned.  “Many were imported machines, and the responsible technicians had returned back to their country,” remembers the man that tells the story. With the help of Japan’s formerly formidable Ministry of Trade and Industry (MITI), missing engineers were rounded up.  A large room was converted into a crisis center, where the team leaders assembled twice a day. The rules were simple: If something works, don’t report it. If there is trouble, report it and ask for ideas.

The basic repairs were done within ten days. End of April, the machines were running. “All were perplexed,” remembers the unsung hero, “full production was established in August, six months earlier than originally estimated.”


The before picture (left) was taken March 18; the after picture was taken April 11.

The Renesas recovery saved  many billions of dollars, and prevented a crisis that would have impacted many industries. Remembers the anonymous retiree, who says he was just one of nearly 100,000 people worldwide who helped bring Renesas back on-line:

“I wish they would have given us just 10 percent of the savings as a fee. Nobody gave us anything, but anyway, we did what we needed to do.”

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Japan’s Carmakers Plan For The Worst Thu, 30 Aug 2012 14:07:48 +0000

Japan’s carmakers are preparing for the next big one, and move to higher ground, says The Nikkei [sub]. Many Japanese car plants are near or next to the water, some on reclaimed land. Large level tracts are rare in Japan, and by building cars at the waterfront, the ship can  come to your loading dock.  After the March 11 earthquake and tsunami, perspectives changed.  

In June, Suzuki acquired about 270,000 sq. meters of land on a hill 80 meters above sea level in Hamamatsu. Suzuki will spend 40 billion yen ($500m) and move some of its production to higher ground and 10 kilometers (6.2 miles) inland.  The Suzuki motorcycle technology research center and part of its motorcycle engine factory will move to the new site.

Preparations by other companies range from rewriting evacuation manuals and drills to complete relocations such as the ones at Suzuki.

A government survey found that more than 70% of firms have drawn up business continuity plans or are currently doing so in the aftermath of the Great East Japan Earthquake and flooding in Thailand

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One Year After The Disaster, A Visit To A Symbol Of The Recovery: Toyota’s Prius C Plant Sun, 11 Mar 2012 15:04:19 +0000

Today, at 2:46 pm, Japan came to a stand-still, again. Trains and subways stopped. People did fold their hands, faced in the general direction of the northeastern coast of Tohoku, and said a silent prayer. Japan and the world marked the one year anniversary of the earthquake and tsunami that left whole towns razed, more than 19,000 people dead or missing, 344,000 people displaced, and a large area around the destroyed Fukushima Daiichi power plant off-limits for decades, if not permanently.

Writers often like to equate the power released by the quake to the nuclear bombs that had been dropped on Hiroshima and Nagasaki. Depending on who you read and believe, it was anywhere between 31,700 and 600 million Hiroshima bombs. Large parts of the coastal areas are dotted with huge, neatly stacked piles of rubble which nobody wants to take and nobody knows what to do with. The devastation was so big that it turned into an attraction on Google Earth.  Considering the immense damage, it is amazing how quickly the country did rebound. On Friday, I visited what was presented to me as an emblem of the amazing turn-around, Toyota’s plant in Kanegasaki, Iwate Prefecture. Here, 1,700 employees are working overtime to build Toyota’s Aqua / Prius c, for which everybody is screaming.

“The Aqua has turned into a symbol of our recovery,” says Tetsuo Hattori, CEO of Kanto Auto Works, one of the members of the sprawling Toyota Group empire. His company is the sole manufacturer of the Aqua / Prius c compact hybrid that itself is turning into a symbol for the turn-around of Toyota. Touted as the world’s cheapest and most fuel-efficient hybrid car, the Aqua sold 13,485 units in January, the first month after its launch. It sold 21,951 in February. It could have sold many more, would the factory in Kanegasaki be able to build more. Toyota sits on 120,000 backorders for Japan alone.

The two lines in Kanegasaki have an annual capacity of 300,000 units, that comes out to 25,000 cars a month. With overtime, output can be raised to 30,000 per month. The plant made 30,000 Aqua in January, 30,000 Aqua in February and will make 30,000 Aqua in March. 24,000 of those stay in Japan. 6,000 are being exported.

The plant is supposed to make other cars than the Aqua. The Iwate plant is also responsible for the production of the Blade, Ist/Scion xD, the Belta/Yaris Sedan, and Ractis. These cars had to make way for the Aqua. All traces of these cars have vanished from the factory.

From the two manufacturing lines to the tree-lined lots where finished cars await shipment, it is Aqua/Prius c as far as the eye can see. Asked what he will do to create more capacity for the Aqua, Hattori says that production of the Ractis may be gradually shifted to the Kanto Auto Works plant in Higashi Fuji. Here, old Toyota standbys such as the Century, or the Crown Comfort, popular with notoriously overpaid Japanese taxi drivers, are being built. A look at the numbers shows that shifting production will bring no relief. It simply cements the status quo. Nevertheless, Hattori flatly denies rumors that the Aqua/Prius c might be built elsewhere than at Kanto Auto Works, or even in a different plant than in Iwate.

We are up in the north of Japan. 500 miles westward, across the sea, is Siberia. The ground is still covered with snow. That snow is “a pain in the neck,” says plant manager Kazutoshi Yoshida. He will keep 1,500 tons of the pain in the neck literally under wraps, and use water from the melting snow to cool the air-conditioning in summer. Once the snow is gone, it will be time for the goats. 12 of them do lawn care duty without using any fuel. They also “create a relaxed mood amongst our workers.” I don’t dare to ask what happens to the well-fed goats come wintertime.

A year ago, I had visited Toyota’s new plant in Ohira, 70 miles south of Kanegasaki. Back then, I had speculated that the plant may be a pilot plant. This time, that title is official. “We want to be the global model plant for compact vehicles,” says a proud Hattori, and his plant manager Yoshida says it again. The workers are highly trained, encouraged to acquire a multitude of skill sets. Workers regularly act as production engineers, providing creative solutions. “This is not something that can happen in emerging nations,” says Yoshida. In 2007, 60 percent of what this plant made was exported. Now, the rate is down to 30 percent, with further reductions likely unless the yen gets weaker and the dollar stronger. If this plant can’t export cars, at least it can export plants.

Some 50 miles from the coast, and sheltered by two mountain ranges, the plant survived the earthquake only slightly damaged. It was back up four days after the quake. Then, it had to wait for parts from less lucky suppliers. One factor in its survivability is the gas-fired cogeneration plant that can provide two thirds of the plant’s electrical power. It will be put to the test this summer. In March and April, the last two of Japan’s 54 nuclear power plants will go off-line for maintenance, leaving Japan’s power grid in an even more precarious state than last summer.

Last Friday, the plant opened to outside visitors for the first time since March 11, 2011. As our plant tour draws to an end, the line stops, workers fold their hands, bow their heads, and face east in silent prayer. It is 14:26, time to remember the dead. But it is Friday, two days ahead of the anniversary.

“Tomorrow, we work with one shift,” says my guide. “On Sunday, people want to rest.“

No work on Sunday. A year after the monster quake, normalcy has returned to Japan. In this part of Iwate, at least.

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After Two Floods, Honda Tanks, Nissan Soars Tue, 31 Jan 2012 12:02:46 +0000

When the March 11 tsunami hit, observers thought that of Japan’s major automakers, Honda would be the least exposed. Most of its global production already is outside of Japan. Very few cars that are produced in Japan are exported. Toyota and Nissan looked much more vulnerable. Distrust predictions: Today, Honda presented the results for the last quarter of 2011. The numbers  look uglier than the cars in the video.

In the October-December quarter, Honda’s operating profit dropped 65 percent to 44.3 billion yen ($580 million). Analysts polled by Reuters had expected twice as much. For the fiscal year ending March 31, 2012, Honda expects an operating profit of 200 billion yen ($2.6 billion), down 65 percent from the year before. In August 2011, Honda had forecasted 270 billion yen. That was before the Thai floods hit.

Top Three Japanese Automakers,  Calendar 2011
(Thousand units. Source: company reports)

Comparing the full year 2011 production numbers (first column: unit production 2011 in thousands, second column: change to 20-10,)  Honda emerges as the worst hit of Japan’s bigger makers. It lost 20 percent of total production. Toyota lost only 8.2 percent, Nissan added 14.3 percent. Despite having most of its production outside of the country, Honda soon emerged as the most unlucky tsunami victim. Parts shortages affected production the world over.

Then in fall last year, Thailand was inundated by a record flood. While other Japanese makers suffered outages due to parts shortages, Honda’s Thai plant was submerged for months and is a near total write-off.

There were more disasters. The high yen had and has all Japanese makers on edge, so did the tanking Japanese market. Only Honda has a remodeled Civic which “got panned in the United States when it was remodeled last year,” as Reuters put it.
Toyota will report on February 7, Nissan on February 8. We will see what their numbers bring. Have a look at the table above  and guess.

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Japanese New Car Market Worst In Decades Tue, 27 Sep 2011 14:15:53 +0000 The Japanese car market is in the midst of the worst crisis since 1978. The Japan Automobile Manufacturers Association expects auto sales in Japan to fall to a 34-year low in the current fiscal year that ends in March 2012. This as a result of the severe production drop, triggered by the March 11 earthquake and tsunami.

JAMA said it expects Japan’s domestic auto sales to fall 3.3 percent from a year earlier to 4.450 million vehicles. That would be the lowest level since March 1978, says The Nikkei [sub].

As companies are solving supply problems and are ramping up production, JAMA expects sales to pick up over the second half of the fiscal year when JAMA forecasts a 17.4 percent rise in sales for the seven months to March. This compares with and cannot quit make up for the 28.6 percent drop in sales in the first five months through August.

All in all,  JAMA expects “overall levels of demand to be sluggish,” as JAMA president and Nissan COO Toshiyuki Shiga said at a press conference today.


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Nissan’s Only Problem: Not Enough Cars Mon, 26 Sep 2011 13:53:23 +0000

Pronounced near-dead in 1999, Nissan has made a remarkable, but often unnoticed turn-around ever since. With little fanfare, the Yokohama company passed Honda as Japan’s second largest auto maker. In China, the land of car growth, Nissan sold 1.3 million cars last year, became largest Japanese brand and has expansion plans for 2.3 million.  Nissan is also the company that recovered fastest from the March 11 tsunami. With only 25 percent of its world output in Japan, Nissan had less exposure that Honda, and especially Toyota. It also was lucky: Nissan could duck the chip shortage that hit Toyota and Honda with full force. Nissan’s engine factory in Iwaki is 60 miles away from Fukushima. A little closer, and it would still be closed. Instead, it was back up and running two months after the disaster. One of the most horrific years for Japan and the Japanese auto industry is shaping up to be the defining year for Nissan. Nissan’s biggest problem: Not enough cars.

“At the moment, we’ve only got one problem – making enough cars. I’ve got back orders for 30,000 cars in Mexico, 20,000 in Latin America. In Europe, even though they’re working seven days a week with shifts, I’ve got orders going back for two months on Qashqai.”

This is what Nissan Chief Performance Officer and Executive Vice President Colin Dodge today said in an interview in Yokohama. In Mexico, the soft underbelly of the U.S., Nissan holds on to an amazing market share of 26.4 percent. Most of the growth of Nissan comes from emerging markets, and Nissan hasn’t even covered all the BRIC markets yet. In China, Nissan is strong. In Russia, Brazil and India, Nissan has “just started,” as Dodge admits.

By the end of this calendar year, both Toyota and Honda will have produced significantly fewer cars than in 2010. Nissan on the other hand already produced 150,000 cars more than in 2010. Says Dodge:

“We’ve recovered from the earthquake as a company, it seems like, about two months quicker than Toyota, and Honda is still not recovered.”

Dodge’s boss, Carlos Ghosn, has another problem: The obscenely high yen. A chief of production doesn’t have his eyes on exchange rates:

“The yen, of course, is unfortunate. However, we’re doing our best to mitigate the effects of the yen. We’re praying for the Japanese government to do something in terms of quantitative easing. If not, it’s looking pretty dark, obviously, but I wouldn’t be depressed for the next six to eight weeks. Let’s make some cars, and sell the cars in the system.”


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Japanese Parts Paralysis, Take 2 Mon, 29 Aug 2011 09:23:58 +0000

Now that the effects of the March 11 tsunami are behind the Japanese auto industry, carmakers are pulling out all stops to make up for lost volume. Only to run into new problems: “Shortages of tires and other autoparts are a growing concern,” reports The Nikkei [sub]. The new shortage is tsunami-unrelated. Its reason: Bad old supply and demand.

According to The Nikkei, Bridgestone has notified automakers that the company has more orders for car tires than it has capacity. Bridgestone thinks it will be short 500,000 tires, that’s 100,000 cars missing from the production stats.

Japan Polypropylene has trouble keeping up with demand for resins used for plastic autoparts.

Also short: Workers. Automakers continue having problems finding enough temporary workers, to help out with the great production surge.




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Watch Out, Wolfsburg: Toyota Expects To Exceed 8 Million In 2011, Has Big Plans For Next Year Wed, 03 Aug 2011 07:17:30 +0000


The race for bragging rights amongst the top three promises to stay interesting throughout the year. Toyota just issued new forecasts which pegs global production across all Toyota Motor Corp. brands at 8.04 million. This should worry Wolfsburg. Volkswagen was seen as the clear number 2 after GM in the 2011 race. Now matters are not so sure.

New Toyota Projections For Calendar 2011

Toyota Change Daihatsu Change Hino Change Total Change
Japanese sales 1,180,000 -25% 520,000 -14% 30,000 -22% 1,740,000 -21%
Overseas sales 5,920,000 -1% 180,000 -5% 90,000 -12% 6,190,000 0%
Worldwide sales 7,100,000 -6% 710,000 -10% 120,000 -15% 7,930,000 -6%
Japanese production 2,790,000 -15% 590,000 -11% 110,000 -14% 3,490,000 -14%
Overseas production 4,360,000 0% 170,000 9% 20,000 -44% 4,550,000 1%
Worldwide production 7,150,000 -6% 760,000 -7% 130,000 -17% 8,040,000 -6%

Change compared to calendar 2010 actuals

End of June, Toyota shocked the world and excited Volkswagen with the news that TMC sees only 6.8 million cars produced globally by the end of the calendar year. This across all brands, Toyota, Lexus, Daihatsu and Hino. We will focus on this total unless otherwise noted, because this number will be used to determine the global ranking.

When we announced this forecast, our admittedly coarse projection for 2011 had GM at 9.3 million for the end of the year, and Volkswagen at 8.1 million. With the contestants separated by more than a million units each, the top three race appeared to be decided at halftime. Now, not so much. We will revisit this topic when we have GM’s numbers for the first half of 2011. We expect these results in a day or two. All we can say now is: Volkswagen has not beaten Toyota just yet.

This revised forecast is only a part of the story. Toyota is pulling out all stops to recover quickly from the devastating effects of the March 11 tsunami.  For the last months, results and especially forecasts have continuously improved.

One indicator: For the Toyota and Lexus brand alone, TMC expects a production of 7.7 million by the end of the fiscal year ending on March 31. With worldwide Toyota/Lexus brand production expected to end up 6 percent lower by the end of the calendar year, just three months later, the production volume is seen up by 5.14 percent for the full fiscal year. This serves as an indicator of how much TMC plans to crank up the volume once the last effects of the tsunami are left behind. Similar projections for Daihatsu and Hino are not available.

Even more, the usually well informed Tokyo bureau of Reuters reports today that Toyota is aiming at a big production boost in 2012. The wire service says that Toyota suppliers have been told today to prepare for 8.9 million Toyota and Lexus vehicles in 2012, not including Daihatsu and Hino. According to Reuters, this would exceed Toyota’s peak volume reached in 2007. Reuters could not receive official confirmation for this plan. Likewise, Toyota Motor Corp. spokesman Paul Nolasco would only confirm to TTAC that his employer “gave some new guidance to suppliers.”

If Toyota fulfills that plan, and if Daihatsu and Hino receive similar attention, TMC could break the 10 million barrier in 2012.  GM is expected to do the same, with Volkswagen in hot pursuit.

This race will not just stay interesting throughout this year. It will get very interesting next year once the contestants are back in fighting form.

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Toyota’s Financials Hit By Earthquake Tue, 02 Aug 2011 13:33:10 +0000 Toyota today announced financial results for the quarter ended June 30, 2011. It was the first full quarter after the March 11 earthquake and tsunami which severely affected production and sales at home and abroad. The results reflect this.

On a consolidated basis, net revenues for the first quarter were 3,441 billion yen ($44.4 billion), down 29.4 percent from the same period last fiscal year.  Operating income plummeted from 211.6 billion yen ($ 2.73 billion) to a loss of 108.0 billion yen ($1.4 billion). There is a before tax loss of 80.5 billion yen ($ 1 billion).  Net income attributable to Toyota Motor Corporation decreased from 190.4 billion yen ($ 2.5 billion) to just 1.1 billion yen ($ 14 million.)

Consolidated vehicle sales for the first quarter totaled 1.22 million units, a decrease of 599,000 units compared to the same period in the prior year.

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This Is A Tsunami Wave Fri, 29 Jul 2011 13:27:45 +0000

The Japanese auto industry slowly but surely is clawing back from the abyss created by one of the worst disasters that were visited upon the island nation. Following the March 11 earthquake and tsunami, the industry had crashed. Three months later and earlier than thought, the industry is at near pre-disaster levels. Data released by the Japan Auto Manufacturers Association shows  the June production at 742,431 units, only 13.9 percent below June 2010.

Japanese Production 2011 By Automaker

Jan Feb Mar Apr May Jun
Toyota 234,045 283,556 129,491 53,823 107,437 249,660
Nissan 81,851 93,432 47,590 44,193 80,036 102,390
Mitsubishi 60,089 61,582 49,434 27,481 47,013 59,069
Mitsubishi Fuso 4,581 6,057 2,635 1,606 3,995 7,833
Mazda 68,841 70,428 39.887 35,313 62,208 80,114
Isuzu 18,125 17,934 8,029 4,794 16,029 21,096
Honda 69,170 70,346 34,754 14,168 34,746 43,289
Hino 8,355 9,628 4,758 4,940 7,049 11,403
Suzuki 73,946 83,729 41,790 58,398 64,848 75,475
Daihatsu 48,440 56,716 28,091 20,578 41,893 59,389
Subaru 36,210 40,729 16,530 25,391 22,438 29,910
UD Trucks 2,293 1,334 889 1,226 1,898 2,597
Others 161 161 161 90 133 206
Total Production 706,107 795,632 404,039 292,001 489,723 742,431
Exports 365,288 431,582 312,478 126,061 202,833 402,042

Once the remaining effects of the disaster have been overcome, we can expect year-on-year growth in the last quarter of 2011 and especially in the first quarter of 2012. But the damage is done.

So far, output in Japan alone is 3,429,934 units for the first six months, down 29.2 percent from the 4,843,770 units total recorded in the first half of 2010. That’s 1,413,836 units swept away, in Japan alone.

Automobile exports for the first half of the year were 1,840,164 units, 20.8 percent below the 2,324,098 units exported in the first six months of 2010.

What you see here are just the effects in and on Japan.  A picture of the global effects on Japan’s Top Six can be seen here.

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Japanese Auto Industry Loses 1.4 Million Units – Nissan Walks Away Unharmed Mon, 25 Jul 2011 13:22:20 +0000

Today is the day when the Japanese majors announce domestic and global data for June and the half year. A little more than three months ago, a massive earthquake, followed by a devastating tsunami, paralyzed much of Japan’s infrastructure. It could not have come at a more inopportune time. The Japanese auto industry was already suffering from weak markets at home and abroad, paired with a rising yen that destroyed profits from exports.  Three months later, how big was the hit?

Japanese and overseas output, June

Manufacturer Domestic Change Overseas Change Exports Change

320,452 -12.6% 360,516 3.3% 135,254 -20.2%

102,390 1.9% 317,441 25.0% 75,901 25.0%

75,475 -22.9% 121,703 -9.3% 18,919 -23.0%

43,289 -50.6% 125,084 -42.1% 12,561 -60.2%

80,114 -2.3% 33,672 1.2% 72,293 3.0%

59,069 8.1% 47,198 25.3% 47,096 25.5%

In June, the Japanese car industry was still battling the effects of the tsunami. However, it had global consequences.

Global output June and YTD

Manufacturer June global Change YTD global Change

680,968 -7.9% 3,375,692 -22.5%

419,831 18.5% 2,114,745 11.1%

197,178 -15.0% 1,360,345 -5.0%

168,373 -44.5% 1,302,707 -27.7%

113,786 -1.3% 548,026 -13.6%

106,267 15.1% 585,526 4.4%
Total 1,686,403 -8.2% 9,287,041 -13.1%

Globally, the Japanese auto industry lost 13.1 percent of its output in the first half year of 2011, compared to the same period in 2010. Not all of this goes on account of the disaster, the industry had been in a downdraft before. However, the Japanese majors made 1.4 million fewer cars from January to June 2011 than in the first half of 2010.

Company-wise, Toyota was hardest hit in raw numbers. Being the world’s largest automaker with half of its capacity in Japan, Toyota is the biggest target.

Surprisingly, Honda took the highest percentage hit.  One thought that with only a quarter of its worldwide production in Japan, Honda would have been spared the worst. But this wasn’t the case. When parts and components are missing, overseas plants stand idle.  Toyota also recovers faster. Honda is still 44.5 percent below June 2010

Very surprisingly, Nissan survived more or less unscathed and could raise its half year output by  11.1 percent. Nissan was better diversified, and plain lucky. If its engine plant in Iwaki would be a few miles closer to Fukushima than it already is, Nissan would not look so good.  Now, 2011 could become the defining year for Nissan. Nissan has big plans for emerging markets, especially Asia. Some of its plans will be released tomorrow in Beijing. We’ll be there.


Data have been compiled from individual manufacturer releases. Some links require registration.

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Japanese Parts Paralysis: Bad Bets With Chips Thu, 21 Jul 2011 15:55:42 +0000

Why was Honda as much hit as Toyota by the March11 earthquake and tsunami? Doesn’t Honda have the bulk of its production outside of Japan? How could Nissan avoid most of the damage, even with an engine factory close to Fukushima?

It was a bit like a roulette game, and it involved a lot of chips.  According to industry talk in Japan, Nissan had taken a large supply of ECU chips before the quake. Honda and Toyota were waiting for their just-in-time delivery.  Honda and Toyota received most of their engine controller chips from one chipmaker, Renesas. Two weeks after the catastrophe, we had pointed out that Renesas and its damaged fab near the epicenter would turn into a major bottleneck. What’s more, Honda had no idea.

Honda bought its engine computers from three different companies, Keihin, Denso and Hitachi Automotive. Honda thought that it was well diversified. What  Honda did not realize at first was that the chips in the controllers were all from the same company: Renesas.

“Before the quake, automakers were trying to diversify their suppliers,” writes The Nikkei [sub] today. “But the troubles at Renesas revealed that when they looked farther down the supply chain — at indirect suppliers — they had in fact actually been relying on single firms for certain components.”

Honda did not have a problem with its V6 engines, which use chips by U.S.  Freescale Semiconductor. More that 80 percent of Honda’s cars volume is small and midsize cars. They usually use in-line four-cylinder engines, and it turned out than in most of their ECUs were microcontrollers supplied by Renesas.

Starting this fall, Honda will begin to use microcontrollers from other manufacturers for some of its models. What’s more there is a drive under way that seeks to standardize common parts across the Japanese industry, and microcontrollers are the ideal target. The firmware in the controllers can change, but the chips can be supplied from multiple manufacturers.


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Suzuki Moves Away From The Water – But Will It Have Power? Fri, 08 Jul 2011 16:30:32 +0000

Suzuki is not buying into the „once in a millennium tsunami.” Suzuki has a lot of its production near the waterfront in Japan’s Tokai region. Scientists give the area between Toyko and Nagoya an 87 percent chance of getting hit by an earthquake with a magnitude of about 8 within the next 30 years. Suzuki’s answer: Let’s get out of here, fast.

According to The Nikkei [sub], Suzuki will spend 40 billion yen ($500m) and move its production to higher ground and 10 kilometers (6.2 miles) inland. Suzuki plans to acquire a roughly 270,000 sq. meter plot in Hamamatsu. Hamamatsu happens to be the city where Suzuki was founded.

The new site is about 50km (31 miles) from the Hamaoka nuclear power plant. The plant has been shut down and will only be allowed to re-start once huge seawalls and other improvements have been built. According to experts, this will take many years.

And this is where the bigger problem is. Japan and especially the Japanese industry may skate through this summer with a lot of perspiration, but without major power outages. The big outages loom next year. 35 of Japan’s 54 reactors are down. Attempts to re-start them are being stopped by politicians. Just yesterday, Prime Minister Naoto Kan gave an order to not restart power plants unless unspecified “stress tests” are performed.  However, within a year, all remaining power plants have to be shut down for routine maintenance. Nobody wants to sign-off on a delay of the maintenance either. Which would leave Japan without nuclear power next year.

Far away from Fukushima, on the southwesternmost island of Kyushu, Kyushu Electric Power has shut three reactors for regular inspections. They cannot be restarted due to the government edict. Nissan has a factory in Kyushu, Toyota has two factories there.

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Tsunami Aftereffects: Toyota’s Production Drops 44.7 Percent In May Tue, 28 Jun 2011 13:34:50 +0000

Toyota’s Japan  production (all vehicles and brands) slumped 46.5 percent in May to 156,379 units. Overseas production did not fare much better, falling 43.3 percent to 196,073 units. All in all, Toyota’s global production plummeted 44.7 percent in May to just 352,452 units. Could it be any worse? Yes, it can:  Exports from Japan cratered 61.7 percent to  47,167 units.

When Akio Toyota predicted a “bottom hit” of total production for May or June, he was not exaggerating.  His company however is recovering faster than originally predicted. According to an emailed statement, “Toyota forecasts its domestic overseas production levels, already at 90 percent in June, to return to near pre-earthquake planned levels in July and return production able to meet consumer needs in November or December.”

Toyota will produce an additional 350,000 vehicles in Japan from October through March 2012 to make up for lost production. From previous statements, we still believe that most of this extra production will fall into the first quarter if 2012.

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Want A Prius? Take A Number Wed, 22 Jun 2011 18:01:47 +0000

The Japanese auto industry might come back to much normal faster that thought. But then there is shippiing. It takes a while to float a few thousand cars across the Pacific. Now add high gas prices and a high demand for fuel efficient cars and you have the reason why Edmunds reports that the U.S. national inventory of the Toyota Prius is down to four-day supply. Ed Larocque, Toyota’s national marketing manager for advanced technology vehicles, told Edmunds that “production in Japan likely will return to full capacity by the end of June.” Which means that that wave of Prii won’t was ashore before end of July.

Matters wouldn’t be as tight if the Prius would be built stateside. According to Larocque, Toyota would “like to have a plant up and active” to assemble the Prius in the U.S. – at some point. originally, the Blue Springs, Mississippi, plant had been slated for Prius production. But then the recession intervened, and Blue Spring is building Corollas.


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Toyota U.S.A. Back To 100 Percent In September Thu, 16 Jun 2011 19:40:52 +0000

Yesterday, we reported that the Japanese auto industry is recovering  faster than previously assumed from the effects of the March 11 tsunami. Overseas factories were expected to be affected for several more months while the problems work themselves through the long supply pipeline from Japan.  Much to everybody’s surprise, the situation is improving at a faster clip at transplant factories as well. Toyota said today that North American vehicle production is expected to return to 100 percent in September.

Eight of Toyota’s 12 North American-built models returned to 100 percent production on June 6. The only models where missing parts are slowing down production are the Tacoma, the Tundra, the RAV4, and the Lexus RX 350, explained Toyota U.S.A. spokesperson Tania Saldana. Production of these vehicles will be back at full capacity in September, which puts Toyota’s recovery well ahead of prior estimates.  The attentive observer will note that all 4 are trucks.  Toyota most likely practiced a little triage and helped those cars first that are needed the most.

“After September we will focus on making-up lost production as much as possible,” said Steve St. Angelo, executive vice president of Toyota Motor Engineering & Manufacturing, North America.

The second half of the year, and especially Q4 should become very interesting when Japanese manufacturers come out swinging to make tsunami-induced losses go away. Toyota U.S.A. chief Bob Carter is already in full sales mode: “Our dealers have a healthy supply of cars and trucks available to sell, with more arriving every day, along with competitive lease and APR programs for our customers.”


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Japan’s Automakers Recover Faster From Tsunami Wed, 15 Jun 2011 10:55:51 +0000

Japan’s major automakers appear to recover faster from the impact of the March 11 tsunami than previously feared (or hoped.) Nissan’s Executive Vice President Takao Katagiri said today that Nissan’s Japanese vehicle production in May was the same or greater than its output in the same month in the previous year.

“We will also probably be able to maintain a normal level in June,” Katagiri  told The Nikkei [sub].  At the annual results conference in May, Nissan CEO Carlos Ghosn had predicted that the company would be back to normal by October. This remains the official party line at Nissan.

Two weeks ago, Toyota confirmed to TTAC that the company will be at 90 percent capacity in June in Japan. Overseas, the situation remains unchanged. A day later, The Nikkei [sub] wrote that Honda “will likely have its domestic production nearly back to normal in July, sooner than expected, as autoparts manufacturers quickly get output back on track.”

Yesterday, The Nikkei [sub] reported that “with earthquake-related disruptions to production close to being resolved, major automakers are changing their focus from restoring output to increasing sales, taking steps to assist struggling dealerships in the disaster zone.”

We will get a better picture next week when Japanese automakers report their May production numbers, at home and overseas. Keep in mind that overseas effects are delayed, due to the length of the supply lines.#

PS: I was in Iwaki when that video was shot, and I can confirm that at least that plant ran at full tilt.

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Tsunami Trauma: Honda Forecasts Heavy Hit On Results Tue, 14 Jun 2011 12:44:47 +0000

Honda joins other Japanese automakers in a delayed post-tsunami forecast. Percentage-wise, Honda expects to be much harder hit than Toyota. Honda expects a net profit of 195 billion yen ($ 2.43 billion) when the current fiscal year ends in March 2012.through March. Last year,  there were 534 billion yen ($6.65 billion) left below the bottom line. That’s a decrease of 63.5 percent.

Analysts are shocked. A post-quake survey of 20 analysts by Thomson Reuters I/B/E/S yielded  expectations of 407.2 billion yen ($ 5.07 billion.) As in the case of Toyota, analysts vastly underestimated the impact of the tsunami, the high yen, and the rise in raw material prices.

The outlook is much weaker than the Y385.43 billion mean estimate in a survey of 20 analysts compiled by Thomson Reuters.

Honda expects its worldwide sales of cars to drop by 212,000 units from 3.512 million in fiscal 2011 to 3.300 million units in fiscal 2012.

“The limited supplies of parts is affecting the production of the new Civic.We are still not able to procure enough electronic devices for some high-end models,” Honda CFO Fumihiko Ike, told The Nikkei [sub] at a press conference today.

Honda thinks its production in Japan will return to normal by the end of June. Overseas production will take several more months before it runs at full capacity.

Note: The financials are for all Honda products, including motorcycles and generators


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Toyota’s Forecast: The Tsunami Won’t Kill Us, But The Yen Might Fri, 10 Jun 2011 18:46:29 +0000

Today, Toyota finally delivered its delayed outlook for this fiscal year. It usually is delivered at the annual results conference, but the tsunami had muddled the waters, so to speak. Now, Toyota has a bit more visibility. Today, Toyota did forecast a 35 percent fall in profit for the fiscal year ending March 31, 2012. Toyota expects to end the fiscal with a net income of 280 billion yen ($3.5 billion).

According to Reuters, that’s “well short of the consensus for a 434 billion yen profit in a poll of 23 forecasts by Thomson Reuters I/B/E/S.” I am proud of the optimism of the forecasters. Personally, after looking at the disaster in Japan, I hadn’t expected any profits. Toyota also predicts an operating loss of 120 billion yen ($ 1.5 billion) for the first half of its fiscal (April through September 2011), to be followed by a big 420 billion yen ($ 5.2 billion) operating gain in the second half (October 2011 through March 2012).

Message to all competing companies: Expect the Japanese to come out with guns blazing once the supply lines are back in shape.

Where Toyota sees a loss is in vehicle sales. Toyota closed out the last fiscal with 7.308 million units sold. Toyota lowered its projection for Fiscal 2012 to 7.24 million vehicles. That’s 68,000 units less.

On a calendar year basis, this will look nastier. April through September 2011, Toyota sees 795,000 units less than last year, to be followed by 727,000 units more than in the preceding year for the October 2011 through March 2012 period.

What this means is that Toyota will end the calendar year 2011 in all likelihood in third place behind GM and Volkswagen. The party line at Toyota is “We don’t want to have the most sales, we want to have the most satisfied customers.” But dropping from top to 3 will hurt the pride, even if the face is brave.

The big caveat: The projections are based on an exchange rate of 82 yen to the dollar.

Toyota CFO Satoshi Ozawa, who presented the forecast today in Tokyo, warned again that the strong yen is the biggest obstacle facing Toyota. In the May conference, Ozawa had said that the break even point for profitable production in Japan is 85 yen to the dollar. Today, the dollar already buys 5 yen less. “We are in a situation where it is becoming impossible for Japan’s manufacturing industry to do business,” Ozawa said today.


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Japan’s Government Wants Standardized Autoparts Fri, 10 Jun 2011 16:15:39 +0000

When I stopped working for Volkswagen in 2005, they had some 400,000 parts, or “numbers” as they are called in industry parlance, in their central warehouse in Kassel. With each car, the number climbed higher. On the other hand, some 5 percent were usually out of stock. The launch of each car caused raw nerves in the parts department. When a part was faulty, dealers and production manager were at war for parts. The production managers usually won, and blamed the dealers for shoddy service.

It’s tough enough to keep the hungry beasts at assembly lines and in workshops supplied with parts during peacetime. If a volcano over Iceland blows ash, or if a huge tsunami wipes out a good deal of Japan, it turns into parts paranoia. Now, Japan’s formerly powerful METI, the Ministry of Economy, Trade and Industry, is using the Tohoku disaster to force the Japanese car industry to standardize a lot of the parts it uses.

“Under the lead of the Ministry of Economy, Trade and Industry, manufacturers of automobiles, parts and materials will look into ways to share more components across the various vehicles produced by the automakers,” reports The Nikkei [sub].

One area is chips. Shortages of microcontrollers turned into a big problem after the tsunami. METI is now considering setting up a committee to discuss the standardization of microcontrollers and other semiconductor-related parts.

This is good news and bad news for the auto industry. The good news is that if a disaster strikes, that chip, battery terminal, brake pad, or cylinder head bolt can be bought from another manufacturer. Larger runs of commodity parts would lower their cost and shorten development times.

The bad news is that it could kill a golden goose. Selling replacement parts at huge mark-ups provides major income for automakers and dealers. Large automakers have it down to a science how to make a part slightly different, just to frustrate the efforts of those who deal in replacement parts. A standardized parts bin eventually will be a bonanza for the Boschs, AutoZones or Pep Boys of this world. It would also lower the barrier of entry for new competition.

Therefore, says The Nikkei, “some in the auto industry worry that using more common parts will shift the focus in the autoparts market too much in the direction of price, exposing Japanese autoparts makers to intense competition from low-cost producers in China and elsewhere.”


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Japanese Automakers And Unions To Government: Lower Then Yen, Or We are Out Of Here Thu, 09 Jun 2011 14:20:49 +0000

In an (especially for Japanese tastes) strongly worded joint statement, Toshiyuki Shiga. Chairman of  Japan Automobile Manufacturers Association, and Koichiro Nishihara, President of the Confederation of Japan Automobile Workers’ Unions threw down the gauntlet to the Japanese government. Executive summary: “We are sick as hell of the high yen and we can’t take it anymore. Do something, or kiss those jobs sayonara.”

Current foreign exchange rate levels represent, for the yen, an appreciation that not only far surpasses all prior projections by Japanese automakers, but also totally fails to reflect Japan’s economic fundamentals.

Over the decades, the Japanese automobile industry has carried out a steady series of cost-cutting and other measures necessary to maintain its international competitiveness.  The yen’s present exchange rate level, however, clearly exceeds the limits of such efforts.  The continuation of this trend seriously threatens the ability to maintain the foundations supporting the manufacturing craftsmanship that has long been the basis of Japan’s competitive edge.  There are also fears that these currency market conditions will have a profoundly adverse impact on employment throughout Japan’s motor industry, including the parts supply and other vital sectors.

Having been heavily affected by the devastating March 11 earthquake and tsunami, automobile production in Japan is at last moving towards recovery.  The yen’s excessive appreciation risks gravely hampering this nascent recovery and, in doing so, imperiling the resurgence of Japan’s weakened economy.

In view of these realities, JAMA and the CJAWU strongly demand that the Japanese government take swift and effective action aimed at reducing the yen’s current strength.

In other countries, talk like this would be shrugged-off as posturing. A joint statement by employers and unions would raise eyebrows anywhere. In highly polite Japan, such a statement is the last step before a suicide note. Shiga is also the COO of Nissan, a company far less exposed to the high yen than Toyota or Honda. One dollar buys 80 yen today.

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Germans Trump Lexus In Japan. And Bloomberg Blows It Bigtime Tue, 07 Jun 2011 13:40:07 +0000

Japan’s March 11 tsunami had more destructive effects than just washing pint-sized (ok, ok, 0.6 liter sized) kei cars to the top of Japan’s sales charts. It also resulted in considerable menboku o tsubusu (literally “breaking of face”, dishonor) for Lexus. On its home-turf Japan, Toyota’s lux-brand was outsold by doitsu (German) BMW, even by Mercedes, a brand said to be popular with the yakuza. Speaking of major menboku o tsubusu: BMW did certainly not top Toyota, as Bloomberg insinuates.

Data published by the Japan Automobile Dealer Association shows Lexus with 1,789 sales in May.  In May, BMW sold 2,292 cars in Japan, while Mercedes sold 2,096. Hot on Lexus’ heels: Audi with 1,615 cars sold in May.

The JADA List. Sales of all brands in Japan, May 2011

Rank Make May ’11 May ’10 Change Rank YTD YTD ’11 YTD ’10 Change
1 Toyota 48,733 112,174 -56.6% 1 394,683 693,631 -43.1%
2 Nissan 37,987 43,623 -12.9% 2 223,944 289,117 -22.5%
3 Suzuki 36,473 47,658 -23.5% 3 216,846 284,290 -23.7%
4 Daihatsu 32,479 44,075 -26.3% 4 205,253 271,686 -24.5%
5 Honda 28,910 44,294 -34.7% 5 201,400 278,896 -27.8%
6 Mazda 12,155 17,542 -30.7% 6 74,954 103,186 -27.4%
7 Mitsubishi 10,552 11,456 -7.9% 7 63,782 79,299 -19.6%
8 Subaru 9,715 12,254 -20.7% 8 61,320 77,083 -20.4%
9 VW 3,859 3,634 6.2% 9 18,506 19,232 -3.8%
10 BMW 2,292 2,599 -11.8% 13 11,411 10,726 6.4%
11 Mercedes-Benz 2,096 2,061 1.7% 14 11,407 12,130 -6.0%
12 Lexus 1,789 1,889 -5.3% 11 13,953 17,010 -18.0%
13 Isuzu 1,648 3,066 -46.2% 10 14,678 17,476 -16.0%
14 Audi 1,615 1,331 21.3% 16 8,093 6,592 22.8%
15 Hino 1,078 1,878 -42.6% 12 11,993 12,428 -3.5%
16 BMW MINI 916 1,003 -8.7% 17 4,766 4,218 13.0%
17 Mitsubishi Fuso 894 1,573 -43.2% 15 8,710 9,156 -4.9%
18 Volvo 880 529 66.4% 18 3,718 2,804 32.6%
19 Fiat 508 362 40.3% 21 2,053 1,938 5.9%
20 Peugeot 480 469 2.3% 20 2,249 2,043 10.1%
21 UD Trucks 323 769 -58.0% 19 2,578 3,267 -21.1%
22 Porsche 267 207 29.0% 23 1,257 1,407 -10.7%
23 Jeep 262 126 107.9% 26 1,107 688 60.9%
24 Ford 229 190 20.5% 22 1,326 1,248 6.3%
25 Renault 222 152 46.1% 24 1,257 1,143 10.0%
26 Citroen 192 168 14.3% 25 1,121 524 113.9%
27 Alfa Romeo 154 115 33.9% 27 903 652 38.5%
28 Cadillac 95 64 48.4% 29 591 385 53.5%
29 Jaguar 71 83 -14.5% 31 437 375 16.5%
30 Chevrolet 70 430 -83.7% 28 741 2,930 -74.7%
31 Land Rover 69 54 27.8% 32 399 277 44.0%
32 Dodge 67 42 59.5% 33 308 326 -5.5%
33 smart 54 63 -14.3% 30 468 339 38.1%
34 Chrysler 53 42 26.2% 34 256 392 -34.7%
35 Lotus 27 28 -3.6% 37 111 124 -10.5%
36 Ferrari 26 30 -13.3% 35 169 140 20.7%
37 Hummer 25 28 -10.7% 36 124 198 -37.4%
38 Maserati 18 14 28.6% 38 94 116 -19.0%
39 BMW Alpina 8 6 33.3% 39 52 78 -33.3%
41 Hyundai 7 18 -61.1% 40 38 88 -56.8%
40 Bentley 7 8 -12.5% 44 28 58 -51.7%
42 Saab 6 1 500.0% 43 29 40 -27.5%
43 Lamborghini 3 6 -50.0% 41 35 29 20.7%
44 Rolls Royce 3 3 42 33 6 450.0%
45 Maybach 1 1 45 4 2 100.0%
46 Opel 1 100.0% 46 1 1
48 GMDAT 47 2 -100.0%
47 Bugatti 48
49 Ruf 49
Other 45 29 55.2% 234 221 5.9%
Total 237,364 356,147 -33.4% 1,567,420 2,207,997 -29.0%

Lexus can find solace in the fact that year-to-date it still leads the Japanese premium market with 13,953 units sold. This lead most likely will not last long. A shortage of Made-in-Japan cars could entice Japanese customers to give foreign brands a hard look, followed by their hard cash. As mentioned last week, sales of imported cars rose 31 percent in Japan last month, a trend that is likely to increase as the year goes on.

The Japan Automobile Importers Association shows only the imports. It also shows the cars manufactured abroad and imported by Japanese makers.

The JAIA List. Sales of the imports of all brands in Japan, May 2011

Rank Make May ’11 May ’10 Change YTD ’11 YTD ’10 Change
1 Nissan 3,274 4 81750.0% 20,649 57 36126.3%
2 VW 3,859 3,634 6.2% 18,506 19,232 -3.8%
3 BMW 2,292 2,599 -11.8% 11,411 10,726 6.4%
4 Mercedes-Benz 2,096 2,061 1.7% 11,407 12,130 -6.0%
5 Audi 1,615 1,331 21.3% 8,093 6,592 22.8%
6 Toyota 916 765 19.7% 5,328 4,211 26.5%
7 BMW MINI 916 1,003 -8.7% 4,766 4,218 13.0%
8 Volvo 880 529 66.4% 3,718 2,804 32.6%
9 Peugeot 480 469 2.3% 2,249 2,043 10.1%
10 Fiat 508 362 40.3% 2,053 1,938 5.9%
11 Ford 229 190 20.5% 1,326 1,248 6.3%
12 Porsche 267 207 29.0% 1,257 1,407 -10.7%
13 Renault 222 152 46.1% 1,257 1,143 10.0%
14 Suzuki 320 366 -12.6% 1,155 2,008 -42.5%
15 Citroen 192 168 14.3% 1,121 524 113.9%
16 Jeep 262 126 107.9% 1,107 688 60.9%
17 Alfa Romeo 154 115 33.9% 903 652 38.5%
18 Cadillac 95 64 48.4% 591 385 53.5%
19 Honda 100 23 334.8% 472 674 -30.0%
20 smart 54 63 -14.3% 468 339 38.1%
21 Jaguar 71 83 -14.5% 437 375 16.5%
22 Land Rover 69 54 27.8% 399 277 44.0%
23 Chevrolet 56 60 -6.7% 362 414 -12.6%
24 Dodge 67 42 59.5% 308 326 -5.5%
25 Chrysler 53 42 26.2% 256 392 -34.7%
26 Ferrari 26 30 -13.3% 169 140 20.7%
27 Hummer 25 28 -10.7% 124 198 -37.4%
28 Lotus 27 28 -3.6% 111 124 -10.5%
29 Maserati 18 14 28.6% 94 116 -19.0%
30 Mitsubishi 16 10 60.0% 60 100 -40.0%
31 Aston Martin 12 3 300.0% 58 39 48.7%
32 BMW Alpina 8 6 33.3% 52 78 -33.3%
33 GMC 7 5 40.0% 52 43 20.9%
34 Hyundai 7 18 -61.1% 38 88 -56.8%
35 Lancia 9 5 80.0% 38 23 65.2%
36 Lamborghini 3 6 -50.0% 35 29 20.7%
37 Rolls Royce 3 3 0.0% 33 6 450.0%
38 Saab 6 1 500.0% 29 40 -27.5%
39 Bentley 7 8 -12.5% 28 58 -51.7%
40 Rover 3 4 -25.0% 18 25 -28.0%
41 Morgan 1 0 8 6 33.3%
42 Pontiac 1 1 0.0% 7 4 75.0%
43 Maybach 1 1 0.0% 4 2 100.0%
44 MG 2 1 100.0% 4 3 33.3%
45 Unimog 0 4
46 Buick 0 1 -100.0% 3 3 0.0%
47 Autobianchi 1 0 2 1 100.0%
48 Kia 1 2
49 Mini 0 0 1 2 -50.0%
50 Opel 1 0 1 1 0.0%
51 Saturn 0 1 -100.0% 1 2 -50.0%
52 DAEWOO 0 2 -100.0%
53 GMDAT 0 2 -100.0%
Others 6 5 20.0% 19 29 -34.5%
Total 19,238 14,691 31.0% 100,594 75,967 32.4%

Japanese import trivia: Japan’s largest importer is Nissan. It outdistanced  perennial leader Volkswagen by successfully importing the March from Thailand.  As you can see from the table above, other Japanese makers are cautiously jumping on the import bandwagon.

More Japanese import trivia: Someone found 124 Hummers this year to be shipped to Japan. Cadillac sees huge (percentage) gains.

Even more Japanese import trivia: Bloomberg was sucked-in by the importers list and blew the story big-time. They headlined: “BMW Tops Toyota in Japan as Quake Hits Lexus.”

Macho BMW does not top Toyota. The 916 Toyotas in the JAIA list are Toyota imports.  The JADA list shows that in May, Toyota sold a total of 48,733 units, 21 times the number of BMW. Toyota remained comfortably in the #1 position, whereas BMW held a respectable #13 year-to-date. In May, BMW rose to #10. Further climbs will be tough.

Instead of visiting Tokyo BMW and Audi dealers, Bloomberg could have checked the JADA list when it came out. It would have made for a more meaty story (“Volkswagen, BMW, Mercedes Top Lexus in Japan”) and it also would have spared Bloomberg a considerable amount of facebreaking. A little more study of JADA data would have told Bloomberg that there’s not much of a story anyway:  Lexus had closed-out 2010 with 33,365 units sold. BMW was less than a thousand units behind with 32,426. What do you expect with Japanese factories closed while they are working overtime in Munich and Dingolfing? A miracle?

Things happen fast in the interwebs. “BMW Tops Toyota In Japan” already has 1,530 hits on Google as I type this.  Before we know it, it will be in Wikipedia, where “the threshold for inclusion is verifiability, not truth.”

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Japanese Auto Industry: We’re Baaaaack! Thu, 02 Jun 2011 11:21:55 +0000


Fresh indications that the Japanese auto industry is getting back on is feet faster than thought. Honda and Toyota were – in numbers of cars not produced – hardest hit by the ripple-effect of the March 11 tsunami. Both originally thought they would not be back to normal before year’s end.  Today, The Nikkei [sub] writes that Honda “will likely have its domestic production nearly back to normal in July, sooner than expected, as autoparts manufacturers quickly get output back on track.” Yesterday, Toyota had confirmed, that the company will be back to 90 percent in June in Japan. Nissan is also near normal and wants to increase production capacity from September.

Due to the pipeline effect, overseas production was hit later, and will be back to normal later – with a vengeance. Come fall, Honda wants to double its workforce in its Indiana plant. Currently, the plant runs at 50 percent capacity. After 1,000 new workers are hired, the plant will double its capacity to 200,000 units per year. At the annual results press conference in May, Nissan CEO Carlos Ghosn had stunned reporters with the announcement that Nissan wants to make up part of the shortfall later in the year.

The faster pace is driven by suppliers that are coming back to life – sometimes helped by thousands of workers dispatched from their customers, the automakers. Chipmaker Renesas resumed output at its Naka fab yesterday. Germany’s Merck re-started making pearl luster pigments at its Onahama plant. Toho Zinc expects to ship corrosion-fighting zinc from its Onahama plant by June 10.


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Quote Of The Day: Japan’s Downgrade Raises All Ships Tue, 31 May 2011 07:19:50 +0000

Amazing quote in today’s Nikkei [sub]:

“Shares in Toyota Motor Corp. gained further ground Tuesday afternoon, after Moody’s Investors Service Inc. said during the lunch break it may downgrade Japan’s sovereign debt ratings.”

Welcome to the wicked world of global economics. The market is betting that the downgrade will make the yen cheaper (it did, you dollar buys a whole extra yen today), which in turn will give hard hit Japanese car exporters a little reprieve. They need it.

Now, U.S. auto industry, don’t get any ideas …



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Japanese Car Exports Down 67.8 Percent In April Tue, 31 May 2011 06:55:11 +0000

Hit by the March 11 earthquake and tsunami, exports of Japanese motor vehicles plummeted 67.8 percent from a year earlier in April.This according to data released today by the Japan Automobile Manufacturers Association. The quake hit all companies, although not equally hard …

Japanese Motor Vehicle Exports April 2011

Apr-10 Apr-11 Diff
TOYOTA 150,118 31,025 -79.3%
NISSAN 52,265 14,642 -72.0%
MAZDA 54,387 20,606 -62.1%
MITSUBISHI 27,878 19,491 -30.1%
ISUZU 11,939 2,770 -76.8%
DAIHATSU 3,594 984 -72.6%
HONDA 27,216 6,473 -76.2%
SUBARU 29,682 8,182 -72.4%
UD TRUCKS 1,472 692 -53.0%
HINO 5,614 3,069 -45.3%
SUZUKI 24,444 17,121 -30.0%
MITSUBISHI FUSO 2,931 1,006 -65.7%
TOTAL 391,540 126,061 -67.8%

In absolute numbers, export-heavy Toyota was hardest hit with a loss of 119,093 vehicles over April 2010. Nissan is a distant, but nonetheless surprising second with a loss of 37,623 units. All in all, the tsunami did cost the Japanese car industry 265,479 cars not exported, compared to April 2010. In dollar terms, the Japanese industry exported $5.9 billion in cars and parts in April, down $5.7 billion or 49 percent. Globally, the Japanese auto industry lost more than 600,000 cars in April.


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