Japanese automakers have been faced with severe parts shortages, particularly with electronic and resin-based components. They have had to slash production after the magnitude-9.0 earthquake and resulting tsunami caused severe damage to factories and a major nuclear power plant, disrupting the power supply.
Toyota said production is down by 500,000 vehicles compared to planned worldwide production. Japan’s production decline is responsible for 400,000 units, leaving dealerships around the globe struggling with vehicle shortages.
Toyota will be ramping up production in June, but Toyota’s President , Akio Toyoda, said he did not know which car models would be built, and at what levels, as the car maker increases production over the coming months. They expect to be back to full operations by November.
The disruption in Japan’s parts supply chain has had a global impact on car makers, as they use the lean technique of “just-in-time” manufacturing. As parts have become missing, car makers like General Motors and Ford Motor Co. are also realizing the downside of not stockpiling parts.
Toyota Executive Vice President Shinichi Sasaki addressed the risk of supply disruption in one of the world’s most earthquake-prone countries. Sasaki stated this was a task for the entire industry, as global competition led to the concentration of manufacturing certain electronic parts as suppliers worked towards achieving economies of scale.
“In light of that, we want to consider encouraging our suppliers to set up more production sites overseas,” he said.
Much of Toyota’s overseas manufacturing still relies on some components being shipped from Japan. Sasaki confirmed the need to expand component production in the country that is manufacturing the vehicles.