China's lockdowns bog down Japan's carmakers

It seems China's plan to bring down active cases has resulted in unforeseen consequences for Japanese automakers. Due to the lockdown in Shanghai, parts suppliers are unable to produce and export parts – resulting in Japanese carmakers not being able to procure the necessary components.

This has resulted in several Japanese companies incurring huge drops in global production. Honda had the largest drop as production went down 54% to 190,000 units. Mazda meanwhile saw a 50% downturn to 46,000 units. Next was Toyota which suffered a 9% decrease to 692,000 units. Surprisingly, Subaru was the only automaker to have a positive reaction to the reduction in Japanese domestic and overseas production, increasing 63% to 70,000 units.

Honda's main plant in Suzuka City, Japan has already halved its production compared to February's outlook while domestic production has dropped 58% from the same month of last year to 27,000 units. On the other hand, Mazda shut down 2 domestic factories in its home market for 8 days last April, resulting in a 53% decrease to 30,000 units. As for Toyota, they have already announced last week that 10 out of its 14 plants in Japan will stop production towards the last week of May and the first week of June.

Even production in China for the automakers was greatly felt. With no parts coming in from their suppliers, Honda's two- and four-wheeled vehicle joint ventures were shut down for 5 days, resulting in production falling 81% to 31,000 units. Toyota stopped car production at its factory in Changchun City, Jilin Province which led to production decreasing by 34% to 93,000 vehicles.

With production at an all-time low for Japanese brands, can they recover from this predicament? The lockdown in Shanghai is set to be lifted tomorrow June 1, 2022, and companies expect that the impact on production will be eased. In fact, several automakers have announced that they will be able to recover after June.

But with China still having a “zero-policy”, some automakers say that this will still pose a risk to production. Combined with the fact that there is still a global chip shortage, car production will likely remain to be unstable in the foreseeable future.

The next time you're wondering why your vehicle has yet to arrive in the country, remember that there is still ongoing parts and chip shortage affecting automakers.

Source: Asia Nikkei