MANILA, Philippines—While motorists have been busy keeping a wary eye on volatile fuel prices, another worrying issue has seemingly blindsided them. The triple disaster that struck the northern part of Japan in March 11 (the earthquake, the resulting tsunami and nuclear reactor meltdown) already has reportedly caused a ripple effect on the Japanese manufacturing sector, specifically automotive and auto parts manufacturing.
Chamber of Automotive Manufacturers of the Philippines Inc. (Campi) president Elizabeth H. Lee has stated publicly that alternative parts sourcing is being sought as a temporary solution. Honda Cars Philippines Inc., Chevrolet Philippines (The Covenant Car Company Inc), Toyota Motor Philippines and Ford Group Philippines have issued separate statements to Inquirer Motoring saying the same thing: That there are enough inventories for the coming months.
There will be delays with fast-moving parts, carmakers admit.
Lee disclosed that automakers, through Jama (Japan Automobile Manufacturers Association Inc.) and locally through Campi, are seeking measures to help mitigate the impact on parts supply, which include CKD packs, by temporarily switching from parts suppliers who are still unable to resume operations, to those who are less affected by the disaster.
“As a result, Asean governments are requested to accept vehicles whose parts are sourced from different suppliers who are equally compliant with required standards to be accepted even prior to obtaining type approvals for the specific parts.”
Lawyer Albert Arcilla, managing director and chief operating officer of The Covenant Car Company Inc. (exclusive distributor of Chevrolet vehicles in the country), told Inquirer Motoring that “though the source of Chevy vehicles are not from Japan (model offers of Chevrolet vehicles in the Philippines are manufactured and assembled at three GM and Chevrolet plants in Thailand, Korea and North America), it would not be improbable that there will be some parts and components that may be sourced from Japan.”
Forecast
Arcilla added: “We have been assured by our principals so far that there are sufficient inventory of vehicles to serve our requirements … in accordance with our three-month rolling forecast. As for the parts requirements, we strictly adhere to the forecasting method for our parts inventory and we do not expect any interruption in this regard.”
Honda Cars Philippines Inc. sales and corporate communications head Voltaire Gonzales said that at present, stock levels for all Honda models for retail sales remain normal, save for the usual mismatches in transmission or color options.
“We have yet to determine with absolute certainty how our stock position is going to be from May,” said Gonzales.
Toyota Motor Corp.—the mother company in Japan—has resumed production since March 17 for its service parts in order to minimize the disturbance to Toyota owners worldwide. As for the parts for production overseas manufacturing affiliates including TMP, TMC was able to resume production from March 21. TMC has also restarted vehicle production March 28 for some hybrid variants such as the Prius at its Tsutumi Plant in Toyota City, and the Lexus CT200h and HS250h at its Kyushu plant in the southern island of Japan.
These developments were reiterated by Michinobu Sugata, TMP president, on an April 11 media briefing. “On top of those, TMC decided to resume production of all models at all Japanese vehicle production facilities from April 18, but the production volume is planned to be approximately 50 percent of ordinary operations.
“In this way, the operational situation seems to be gradually getting better. However, at this moment, we still do not see clearly when TMC, its subsidiary vehicle manufacturers, and its suppliers can fully recover their operations at 100 percent,” said Sugata.
Added Sugata: “Generally, our local operations in the Philippines for CBU importation and sales have adequate inventory from the pipeline to meet our volume this month. However, for some of the fast moving variants, our dealers are running short of their stock. In this regard, I would like to apologize to our customers who will be inconvenienced by the delay in the delivery of their vehicles.
“In the area of after-sales operations, we continue to receive service parts from Japan. In terms of production from our Sta. Rosa plant, we anticipate a temporary limitation in the supply of production parts in the third week of April due to the momentary stoppage of parts production in Japan from March 14 to 20. Because of this, we decided to extend our Holy Week holiday break from April 16 to April 24. In effect, the original scheduled three-day work from April 18 to 20 will be recovered sometime in the months of July to September.
“As a Japanese national, I have no doubt at all that Japan will surely get back on its feet and will be much stronger. My only regret at this moment however, is that I cannot say when this will happen and for how long our dealers and customers would be inconvenienced by the delay in the supply of production parts. I sincerely hope that our customers will keep their trust and confidence in Toyota,” said Sugata.
Still waiting
Ford Group Philippines’ AVP for communications Anika Salceda Wycoco sent an announcement on April 18, highlighting planned “down days” for the year that were pulled ahead as a precautionary move.
“We are working with our suppliers on a daily basis to minimize any disruptions and are acting proactively and decisively to stay ahead of the situation. We have also pulled ahead previously scheduled downtime or taken temporary downtime in North America, Europe and Asia Pacific.
The statement added: “We do not expect the production disruptions in Asia Pacific to have a material impact on our overall results. Our inventories are adequate to support consumer demand at this point.”