A year after the earthquake and tsunami that devastated northeastern Japan, the country’s automakers are back on solid footing, taking advantage of the rebound in the U.S. auto market and elsewhere. Nissan is at the forefront, the Associated Press reports in this detailed story:
At Nissan, the earthquake had ground auto production to a halt, left giant cracks at a key factory and killed five employees and 17 family members.
It’s a story of a surprising recovery that’s playing out at other Japanese automakers, but particularly at Nissan.
CEO Carlos Ghosn calls the recovery miraculous, crediting hard work at his company. The automaker had a record sales year of 4.7 million vehicles in 2011. That was up 14% from the previous year.
By May, Nissan’s Iwaki plant in Fukushima Prefecture, devastated by the disaster that killed more than 19,000 people, was almost completely restored to full operations.
There are still big risks from perennial problems such as the strong yen, executives and analysts say.
Globalization of production can help Japan’s automakers minimize the yen challenge but comes with its own potential headaches as shown by last year’s flooding in Thailand — a major production base for Japanese carmakers.
Toyota had initially expected to lose production of 2 million vehicles from the March 11 disaster, which damaged key suppliers in northeastern Japan, including Renesas Electronics, a computer-chip maker:
When all was done, Japan’s No. 1 automaker ended up losing production of 370,000 vehicles — 220,000 of them in the first month after the disaster.
Production at Toyota, which makes the Camry sedan and Prius hybrid, was back to near-normal levels by September last year.
“The tremendous efforts of our workers on the ground led to a recovery so quick it was outside our imagination,” Toyota President Akio Toyoda said last year.
The production woes knocked Toyota from the top place in global vehicle sales to No. 4. General Motors regained its crown as the world’s No. 1 automaker, which it had relinquished to Toyota in 2008.
The disaster even worked to identify weaknesses in the industry’s parts supply chain.
The automakers are studying ways to spread out risks among suppliers. Toyota is targeting a plan to get production back to normal in two weeks if another disaster should strike.
Although the Japanese economy is ailing amid towering reconstruction costs and the trillions of yen (billions of dollars) to tackle the crisis at the crippled Fukushima Dai-ichi nuclear plant, the auto industry is one bright spot.
Honda had the toughest problems, hit by the flooding in Thailand late last year, which also disrupted production on top of the disaster in northeastern Japan. Still, Honda’s global production is now back at pre-disaster levels, except for Thailand.
The production disruptions reverberated globally.
In North America, Japanese manufacturers slowed their assembly lines or shut production altogether when they couldn’t get parts from Japan.
Michael Robinet, the managing director of IHS Automotive Consulting, estimates lost regional production totaled 400,000 vehicles.