28/03 Disaster likely to hit U.S. car sales / Carmakers hurt by parts crunch may cut exports

Yoichiro Shikagawa and Hideki Kishimoto / Yomiuri Shimbun Staff Writers

Domestic automakers have begun reviewing their sales plans for North America following the impact of the March 11 earthquake and tsunami on their factories and parts suppliers.

Honda Motor Co. and Mazda Motor Co. plans to reduce exports to the United States, and Toyota Motor Co. is preparing for the possibility of suspending production in North America.

The automakers have already begun winding down domestic production due to the March 11 disaster. Moves to scale back sales in one of their major overseas markets are expected to deliver a blow to business. Observers have said the automakers will be forced to revise their global sales strategies if the current situation continues.

Honda has suspended its domestic production until April 3. The disaster badly damaged its assembly plant in Tochigi Prefecture and auto parts suppliers in the Tohoku region.

According to sources, Honda likely will reduce exports to the United States of certain models made in Japan, including the Honda Fit, a subcompact, and the Insight hybrid. Honda is expected to reduce deliveries of the two models to U.S. dealerships from May.

About 20 percent of Honda cars sold in the United States are imported from Japan. If there are further delays in the company's production plants returning to full capacity, Honda's market share in North America could drop. Its market share in the region was 10.6 percent in 2010, which was fourth among automakers.

Mazda has temporarily halted orders from U.S. dealerships and may drastically review its business there if it is forced to extend the suspension of its operations.

The earthquake and tsunami did not directly affect Mazda's head office in Fuchucho, Hiroshima Prefecture, nor its assembly plants. However, as many auto parts suppliers in the Tohoku region were hard hit by the disaster, it has become difficult for Mazda to maintain its current export volume.

Mazda sold about 230,000 vehicles in the United States in 2010, about 17.8 percent of the automaker's total sales. Its compact car Axela, known as Mazda 3 in the United States, and sport-utility vehicle CX-7 are especially popular in the country, but both models are imported from Japan.

Mazda has the highest proportion of cars produced in Japan among Japanese major automakers--about 70 percent.

Toyota has told employees in North America that the company may from April temporarily halt regional production there as it is predicting it will soon run out of electronic parts.

Toyota and Fuji Heavy Industries Ltd., the maker of Subaru brand vehicles, have stopped overtime and Saturday operations at factories in North America to avoid running out of parts too quickly.

(Mar. 28, 2011)