Many companies have been finding it tough to operate after the devastating effects following the Japanese earthquake, and it is Japan’s Auto Production that’s seems to be hit the most. We already know that production had to either be suspended or slowed, but we are very surprised that shares in the big three companies (Toyota, Honda and Nissan) has not been hit.
Having said that, the increase in shares is only for the short term, and we have been warned by a report in BusinessDay that operating profit for Toyota — the biggest of the three — could see it reduced by 84 percent in its next business year. If this forecast does come true, then things could become much worse for Japan as a country.
Some assembly lines were on the coast of Japan when the tsunami hit, which caused the production loss of 40,000 vehicles. We have already seen the effects of this hit other countries. It is no secret that other automakers source items from Japan, such as Ford who orders in certain pigments from Japan. It now seems as though the Blue Oval has had to cancel the production of all black vehicles.
This certainly gives you a small taste of how bad the situation is for the auto industry, and that is without thinking about the much larger market — Consumer electronics.
This is yet another blow for automakers, as they have only just managed to fight their way out of a recession. However, the Japanese has had it hardest, as they have been marred by a succession of recalls. Let us hope that production can get back to what it was before the terrible event.