Japanese car makers resume overseas parts supply from next week

“After the earthquake and tsunami in Japan last Friday, there was no production interruption for GAC Honda and GAC Toyota.” Yesterday, GAC Group stated that the production of its Japanese joint venture has not been affected by the suspension of production by Japanese car companies so far. It is understood that from next week, Toyota and other companies will resume supply of key spare parts to overseas. The Guangdong auto industry, which is concentrated in the Japanese joint venture company, will be able to avoid disruption of production due to shortage of key components.

The relevant person of GAC stated that it is still unable to fully assess the impact of the earthquake in Japan on the joint venture company, but so far production has remained normal. The latest assessment issued by Honda China yesterday showed that by the end of March, the earthquake in Japan will not affect Honda’s production activities in China. Honda’s production base in Japan decided to suspend production until March 20. Toyota's seven auto parts factories have resumed production on the 16th and will take the lead in producing high-demand parts for overseas markets on the 21st. Some of Nissan’s locally-affected factories that have suffered much less damage have also started production.

According to the person in charge of Guangqi Honda, currently more than 90% of Guangben's auto parts are purchased in China, and only a few key components are imported from Japan. This higher level of localization has prevented joint venture companies from being hit by shocks. It is understood that in the event of a complete interruption of the import of key components, the joint ventures can maintain normal production for about two weeks.

However, due to the instability during the post-disaster reconstruction period, the resumption of production by Japanese automakers remains to be seen. However, people in the industry believe that after the earthquake, accelerating the localization development in China will be a trend for Japanese car companies. On the 15th, Toyota Motor Corporation's chief executive and Minister of China Sasaki Sao indicated that "the Chinese market will become the top priority for the development of traction companies. In the future, Toyota will further strengthen its localization reform in China." Toyota has released a focus of development in recent days. The medium-term plan for the transfer from Japan, the United States and Europe to emerging markets is expected to increase the proportion of Toyota's global sales in Toyota to 15% by 2015, reaching 1.5 million vehicles.

Sasaki said that at the end of last year, Toyota had invested 689 million U.S. dollars to establish a China R&D center, and will further strengthen its localized research and development for the Chinese market together with its partners and joint ventures. At the same time, in order to implement a plan to boost sales in China, Toyota is discussing with its partners plans for the expansion of production capacity in regional factories including Tianjin and Guangzhou.