Automotive and technology supply chains hardest hit from natural disasters

The automotive and technology sectors are among the hardest hit after the Japan disaster last month, with over half a million cars expected to be cut from assembly lines worldwide, according to a new report.

Moody’s Investor Service has singled out the damage the earthquake and tsunami has had on Toyota and Honda. 
 
Toyota and Honda in Japan were still shuttered two weeks after the quake, because some of their suppliers are located in the northeast, which suffered the brunt of the earthquake and the tsunami. Honda, which has 110 suppliers in the devastated region, indicated that a tenth of those suppliers are meeting difficulties in restarting operations.
 
“Ascertaining conditions over the entire supply chain from the materials stage onward and returning to normal operations or switching to alternative parts is difficult,” wrote JP Morgan analyst Kohei Takahashi in a report, suggesting that the car plants may “remain in disarray” for a longer period than expected.
 
By the end of March, Bloomberg estimates, 600,000 vehicles worldwide may fail to roll out of assembly lines because of problems at Japan's auto parts makers and other suppliers, including the maker of a paint pigment.

Michael Robinet of US research organisation IHS Automotive told the business information provider that some 320,000 vehicles have already been lost as of March 24.
 
“The next surge of shutdowns comes when the pipeline of parts that were already built dries up,” Robinet told Bloomberg.

“The rate of lost production will accelerate once North American plants join in,” he said.

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