These tiny automobiles usually featured very small engines to keep taxes much lower than larger cars.
The average person in Japan was now able to afford an automobile, which boosted sales dramatically and jump started the auto industry toward becoming what it is today.
Rapidly increasing domestic demand and the expansion of Japanese car companies into foreign markets in the 1970s further accelerated growth.
Automobile production in Japan continued to increase rapidly after the 1970s, as Mitsubishi (as Dodge vehicles) and Honda began selling their vehicles in the US.
Even more brands came to America and abroad during the 1970s, and by the 1980s, the Japanese manufacturers were gaining a major foothold in the US and world markets.
But during a few minutes on March 11 this year all that changed.
To me it is another example of how vulnerable we humans are, and that there is no algorithm in the world that can predict events of this kind.
But if we spent more time watching what actually is going on, instead of trying to calculate it, we might have been given a fair warning.
Anyway – the Economist Intelligence Unit have just released a report on the consequences of the earthquake for the once great Japanese Car Industry. Company by company.
It is kinda depressing.
The automotive sector, along with the electronics industry, quickly emerged as the industry suffering most from Japans devastating March 11th earthquake and subsequent tsunami.
Speculation has been rife about how the shortage of components and power will affect Japanese, and global, vehicle production.
But only now are that the true facts starting to be seen.
Figures released this week showed that Japan‘s vehicle sales slumped to their lowest-ever monthly tally in April, down 51% from April 2010 to just 108,824 units.
Domestic carmakers all suffered badly, but Toyota was particularly badly hit, with sales down 69%.
A few foreign carmakers, notably South Korea’s Hyundai and Kia, gained ground thanks to the disruption.
The sales numbers confirmed last week’s bad news from the Japanese carmakers, whose production reports for March made for depressing reading.
All of the major vehicle manufacturers bar Nissan built at least 50% fewer cars in their Japanese factories in March compared to a year ago, while most of their overseas facilities also saw output fall.
To blame was the back-up in the supply chain of crucial components, as well as disruptions to the car and component factories electricity supply.
Toyota is the worst-hit of them all.
Domestic output plunged by 62.7% during March compared to the previous year to just 129,491 vehicles, which was the company’s lowest monthly production total since records began in 1976.
Component shortages have also forced Toyota to halt production at plants all over the world.
Its production outside of Japan slumped by 29.9% in March to 542,465 vehicles and in the US,
Toyota’s factories are currently operating at just 30% of capacity. With the April sales drop mirroring this slump in output, the numbers are now looking so bad that Toyota risks having to hand back the title of worlds largest carmaker to General Motors (GM) of the US, from whom it stole it in 2008.
Most of Toyota’s rivals are in the same situation. Hondas Japanese and rest-of-world production fell by 62.9% and 19.2%, respectively, in March.
Mazda Carol
Mazda’s domestic production fell by 53.6% and global production by 33.8%.
Mitsubishi fared better, witnessing a less shocking 25.7% fall in its domestic production in March to 49,434 units and a relatively modest 10.9% drop in global output to 106,229 units.
Japans second-largest carmaker Nissan is the only one with a positive story to tell.
Although its domestic production slumped by 52.4% in March to 47,590 vehicles, this was offset by record global production levels. Nissan’s rest-of-world production soared by 33.3% to 335,114 units in March, its highest-ever monthly tally.
This pushed up the company’s global production for the month by 9% above last years levels, to a record 382,704 units.
The disruption caused by the earthquake and tsunami are unsurprising, given the number of component suppliers that are based in north-eastern Japan.
But more worrying still is how long it will take most of the carmakers to get their production levels back to normal.
After conducting an in-depth analysis of its suppliers, Toyota says that normal production will not resume until either November or December of this year.
Mitsubishi 500
Japanese production will start to ramp up in July and North American production will ramp up in August, once the required components are shipped overseas from Japan.
The company says it does plan to continue procuring parts from the same suppliers, but is also considering substitute parts from other suppliers.
There is still an unstable supply of around 150 components, mainly electronic, rubber and paint-related, the company said.
To all the customers who made the decision to buy a vehicle made by us, I sincerely apologise for the enormous delay in delivery, were the words of Toyota President Akio Toyoda.
Honda N360
Likewise, Honda admits that it will not be business as usual until the end of 2011.
As the supply of parts remains fluid, decisions concerning production from July on will be made step-by-step while monitoring the situation, the company said in a statement.
Until then, many of its factories, both in Japan and overseas will continue to operate at half of their planned production levels for the year.
Nissan, on the other hand, is bullish about its near-term outlook, predicting that its global production for May will stand at 90% of its planned production levels.
“Since we took measures in the immediate aftermath of the quake, we have been able to procure components necessary for our immediate production,” is the company’s only explanation so far on how it has achieved this.
At the same time as coping with the disruption in supplies, carmakers will also have to cope with the continued disruption in the Japan car market.
April’s slump in demand was mainly supply related, but there is little doubt that the tsunami will also have an effect on national demand at least in the short-term.
In the north-east, the disruption to infrastructure and demand will last far longer.
In the longer term, the building work required to repair the damage will boost the economy again, but the ongoing crisis at the Fukushima nuclear power plant has confounded expectations that the recovery will be quick.
In April, the Economist Intelligence Unit once again downgraded its forecast for Japan’s GDP growth from 1.4% to just 1% for 2011. We did, however, make a slight upward revision to our forecast for 2012, which now stands at 1.8% growth.
This is a slightly conservative forecast compared to the 2.3% growth in 2012 predicted by the France-based OECD.
Its report, issued last week, found that an extended downturn in the Japanese economy was unlikely, thanks to a pick-up in trade from the wider Asian region, as well as government fiscal stimulus packages.
If that is true, then it will be some small comfort to Japan’s carmakers, who continue to struggle through their worst-ever crisis.
By Economist Intelligence Unit
Greece was the first country ever to default in the year 4 BC. I looks like Greece is going to do it again, ups….
Japanese Car Industry Is Getting Nuked
The true effects of Japans auto industry after the earthquake is about to become clear. According the Economist Intelligence Unit, is it not good news.
“Speculation has been rife about how the shortage of components and power will affect Japanese, and global, vehicle production.“
Economist Intelligence Unit
The Japanese automotive industry is one of the most prominent industries in the world. Japan was the world’s largest vehicle manufacturer in 2008 but lost one rank in 2009 to current leader China, although the automotive industry in Japan still remains unrivalled by quality standards. But that has all been changed.
During the 1960s, Japanese automakers launched a bevy of new kei cars in their domestic market.
These tiny automobiles usually featured very small engines to keep taxes much lower than larger cars.
The average person in Japan was now able to afford an automobile, which boosted sales dramatically and jump started the auto industry toward becoming what it is today.
Subaru 360
The first of this new era, actually launched in 1958, was the Subaru 360 . It was known as the “Lady Beetle”, comparing its significance to the Volkswagen Beetle in Germany .
Other significant models were the Suzuki Fronte , Mitsubishi 500 , Mazda Carol , and the Honda N360.
Suzuki Fronte
Rapidly increasing domestic demand and the expansion of Japanese car companies into foreign markets in the 1970s further accelerated growth.
Automobile production in Japan continued to increase rapidly after the 1970s, as Mitsubishi (as Dodge vehicles) and Honda began selling their vehicles in the US.
Even more brands came to America and abroad during the 1970s, and by the 1980s, the Japanese manufacturers were gaining a major foothold in the US and world markets.
But during a few minutes on March 11 this year all that changed.
To me it is another example of how vulnerable we humans are, and that there is no algorithm in the world that can predict events of this kind.
But if we spent more time watching what actually is going on, instead of trying to calculate it, we might have been given a fair warning.
See also – More Mysterious “Monster Fish” Comes To Surface
Anyway – the Economist Intelligence Unit have just released a report on the consequences of the earthquake for the once great Japanese Car Industry. Company by company.
It is kinda depressing.
Here is a summary:
The automotive sector, along with the electronics industry, quickly emerged as the industry suffering most from Japans devastating March 11th earthquake and subsequent tsunami.
Speculation has been rife about how the shortage of components and power will affect Japanese, and global, vehicle production.
But only now are that the true facts starting to be seen.
Figures released this week showed that Japan‘s vehicle sales slumped to their lowest-ever monthly tally in April, down 51% from April 2010 to just 108,824 units.
Domestic carmakers all suffered badly, but Toyota was particularly badly hit, with sales down 69%.
A few foreign carmakers, notably South Korea’s Hyundai and Kia, gained ground thanks to the disruption.
All of the major vehicle manufacturers bar Nissan built at least 50% fewer cars in their Japanese factories in March compared to a year ago, while most of their overseas facilities also saw output fall.
To blame was the back-up in the supply chain of crucial components, as well as disruptions to the car and component factories electricity supply.
Toyota is the worst-hit of them all.
Domestic output plunged by 62.7% during March compared to the previous year to just 129,491 vehicles, which was the company’s lowest monthly production total since records began in 1976.
Component shortages have also forced Toyota to halt production at plants all over the world.
Its production outside of Japan slumped by 29.9% in March to 542,465 vehicles and in the US,
Most of Toyota’s rivals are in the same situation. Hondas Japanese and rest-of-world production fell by 62.9% and 19.2%, respectively, in March.
Mazda Carol
Mazda’s domestic production fell by 53.6% and global production by 33.8%.
Mitsubishi fared better, witnessing a less shocking 25.7% fall in its domestic production in March to 49,434 units and a relatively modest 10.9% drop in global output to 106,229 units.
Although its domestic production slumped by 52.4% in March to 47,590 vehicles, this was offset by record global production levels. Nissan’s rest-of-world production soared by 33.3% to 335,114 units in March, its highest-ever monthly tally.
This pushed up the company’s global production for the month by 9% above last years levels, to a record 382,704 units.
The disruption caused by the earthquake and tsunami are unsurprising, given the number of component suppliers that are based in north-eastern Japan.
After conducting an in-depth analysis of its suppliers, Toyota says that normal production will not resume until either November or December of this year.
Mitsubishi 500
Japanese production will start to ramp up in July and North American production will ramp up in August, once the required components are shipped overseas from Japan.
The company says it does plan to continue procuring parts from the same suppliers, but is also considering substitute parts from other suppliers.
There is still an unstable supply of around 150 components, mainly electronic, rubber and paint-related, the company said.
To all the customers who made the decision to buy a vehicle made by us, I sincerely apologise for the enormous delay in delivery, were the words of Toyota President Akio Toyoda.
Honda N360
Likewise, Honda admits that it will not be business as usual until the end of 2011.
As the supply of parts remains fluid, decisions concerning production from July on will be made step-by-step while monitoring the situation, the company said in a statement.
Until then, many of its factories, both in Japan and overseas will continue to operate at half of their planned production levels for the year.
Nissan, on the other hand, is bullish about its near-term outlook, predicting that its global production for May will stand at 90% of its planned production levels.
“Since we took measures in the immediate aftermath of the quake, we have been able to procure components necessary for our immediate production,” is the company’s only explanation so far on how it has achieved this.
April’s slump in demand was mainly supply related, but there is little doubt that the tsunami will also have an effect on national demand at least in the short-term.
In the north-east, the disruption to infrastructure and demand will last far longer.
In April, the Economist Intelligence Unit once again downgraded its forecast for Japan’s GDP growth from 1.4% to just 1% for 2011. We did, however, make a slight upward revision to our forecast for 2012, which now stands at 1.8% growth.
This is a slightly conservative forecast compared to the 2.3% growth in 2012 predicted by the France-based OECD.
Its report, issued last week, found that an extended downturn in the Japanese economy was unlikely, thanks to a pick-up in trade from the wider Asian region, as well as government fiscal stimulus packages.
If that is true, then it will be some small comfort to Japan’s carmakers, who continue to struggle through their worst-ever crisis.
By Economist Intelligence Unit
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