Affected by Thailand's supply shortage, Honda Motors cuts North American production by 50%

Yesterday, Honda Automobile issued a statement that from the 2nd to the 11th, due to the supply chain shortage from Thailand, the production of Honda's US and Canadian factories will be adjusted. It is reported that the adjustment is as high as 50%.

Honda Motors stated that the production plan after the 14th will be decided depending on the circumstances. Production may be affected for several weeks, and more production reduction plans may be announced later.

A letter from Honda Motor to a US distributor stated that some Honda's Asian suppliers are currently unable to maintain spare parts production, which will affect Honda's North American production. This effect will continue from November to late December.

Originally, Honda Motors expects to return North American production to normal levels before the earthquake at the end of this year. The North American market’s production cut in November undoubtedly disrupted its recovery plan. In the past September, Honda’s US sales fell 6% year-on-year, while the US overall market grew by 10%.

Although 80% to 90% of North American models are sold locally, some key components, especially electronic components, are supplied overseas.

In the October 31 announcement, Honda stated that the Thai factory stopped production as early as October 4, and it was difficult to judge when it was time to resume production.

Japan's Suzuka factory and Saitama factory will begin production adjustments on November 7th, and the end of production adjustments will also depend on the situation. Honda Motors stated that it is advancing the replacement of parts and components.

However, Zhu Linjie, a spokesman for Honda China, told China Business News that the Chinese Honda plant has not yet been affected by floods in Thailand.

In other regions, Honda Motors stated that it will be affected by the shortage of components caused by floods in Thailand.

In the Japanese earthquake, Honda was the most affected company in the Japanese system. The flood in Thailand is no exception.

At the same time, Toyota Motor also stated that production in Japan began to adjust since October 24 and continued until October 29. Adjustments from October 31 to November 5 will be subject to assessment.

Toyota's overseas factories in the United States, Canada, South Africa, Indonesia, the Philippines and Vietnam also began to adjust production from October 31st. After the 7th of November, according to the assessment of the development of floods in Thailand, it is decided whether to continue adjusting.

The spokesman for Toyota China News, Nguyen Nguyen, told reporters that at present it has not affected the production plans of Chinese factories. Toyota China is closely watching and evaluating the follow-up impact.

Nissan Motor Co., Ltd. announced in the flooding situation in Thailand that production outside of Thailand has not been affected. Nissan’s China Public Relations Director told reporters that the Thai factory did not provide spare parts for other factories, and it would not affect other parts of the country.

Taking into account the impact of flooding in Thailand, Honda stated that it is not currently possible to make an estimate of the financial year results as of the end of March 2012. According to its fiscal second quarter financial report released on October 31, affected by the earthquake and the appreciation of the yen, net profit fell to 106.4 billion yen (US$760 million) from 135.9 billion yen in the same period last year.