Supply challenge if closure lasts long

The closure of plants by three major Japanese car makers after a devastating earthquake and tsunami may have limited impact on their production in China but future supplies may face challenges if the shutdown lasts longer.

Toyota Motor Co, the world's largest auto maker, has halted production at all of its 12 factories in Japan starting from Monday while Nissan halted output at all of its four Japanese plants and said restarting them could depend on whether it can get parts.

Officials from Toyota, Nissan and Honda in China Monday said all their Chinese plants are operating normally.

"We are still assessing the damages and inventories and hope to minimize the impact to the lowest level," said Liu Peng, a communication official at Toyota China.

Industry analysts estimated the impact from lost production would be limited as car makers source most spare parts from domestic suppliers.

But the future supply of spare parts and imported vehicles from Japan will be affected as efforts to restore production in Japan may be hampered by damage to infrastructure and power shortage following the magnitude-9 quake last Friday.

"Unless there is a very high brand loyalty, car makers from Germany and the United States may tap the unexpected growth opportunity," said Zhang Xin, an analyst at Guotai Junan Securities Co.

Honda said in a notice yesterday that next week's production was uncertain at its Chinese joint venture, Guangzhou Honda.

"We bought more than 95 percent of spare parts from local suppliers, but some of our second-tier suppliers do need some imported spare parts," an official from Guangzhou Honda said Monday.