• Kyodo


Japanese automakers might be able to resume full-scale production in October after overcoming their parts procurement and power shortage difficulties, according to industry analysts.

Amid the difficulties triggered by the March 11 earthquake-tsunami disaster, Citigroup Global Markets Japan Inc. expects operating losses booked by all automakers in the first half of the business year to climb to a record high.

Automakers are aiming to return to their predisaster production levels as early as possible.

“We are making efforts to restore full-fledged production in two to three months,” said Honda Motor Co. President Takanobu Ito.

But automakers could be forced to suspend operations again due to a shortage of semiconductor chips because an important plant belonging to a major chipmaker was damaged by the earthquake, market research institute IDC Japan said.

Production of system-on-a-chip semiconductors, which are used in car navigation systems, is expected to drop by around 14 percent worldwide this year, said IDC Japan.

Citigroup analyst Noriyuki Matsushima projects the operating rate for automakers will be 40 percent from April to June and 60 percent from July to September, before rising back to 100 percent in the October-December quarter.

The operating rate for plants in areas that receive power from Tokyo Electric Power Co. or Tohoku Electric Power Co. is likely to remain at 70 percent in the second half of fiscal 2011, which ends in March 2012, according to Matsushima.

The disaster has forced the two utilities to suspend operations at some of their power plants.

UBS Securities Japan Ltd. and JPMorgan Securities Japan Co. also projected that a full recovery in production will come in October or later, taking into account difficulties that computer chip maker Renesas Electronics Corp. and others face in restoring plants in disaster-hit areas.

IDC Japan said Renesas, which has a 75 percent share of the global system-on-a-chip market, is unlikely to be able to supply semiconductors to automakers from late May to the end of June because production at its quake-hit plant in Ibaraki Prefecture has been suspended.

“Automakers and electronic component makers may not only face output reduction, but also suspension of output,” though many of them have resumed operations since the earthquake and tsunami, said Tomoaki Nakamura, vice president of research at IDC Japan.

Renesas plans to partially resume production in June at the earliest, but will begin to make progress in eliminating parts shortages around September, according to JPMorgan.

In addition to Renesas, some other auto parts makers have been damaged, presenting a hurdle to carmakers.

Another bottleneck in the scramble to return to full production is that the main auto factories are in areas where electricity is supplied by Tepco or Tohoku Electric, which took heavy damage from the disaster.

There is growing concern that more overseas factories could suspend operations from May to June, when parts in inventory may run out.

Citigroup projects Japanese automakers’ global output will fall 15 percent in 2011 from the previous year, including first-half production that could plunge 40 percent from a year earlier.

Toyota carbon fiber


Toyota Motor Corp. will join a project to develop carbon fiber composite materials for use in automobiles, sources said.

The automaker will work with the Japan Aerospace Exploration Agency and other partners under the project.

The move is intended to reduce the weight of vehicles and improve fuel economy.

The partners plan to form a research and development center at Nagoya University in fiscal 2012, which starts next April.

They plan to spend some ¥2 billion together on the new center, most of which will come from the government in the form of subsidies.

The partners also include other automakers, such as Mitsubishi Motors Corp., as well as rail car makers.

Carbon fiber composite materials are currently used in aircraft but not in commercial cars due to their high costs.

Toyota and its partners plan to use such products in next-generation vehicles, such as electric cars, which need to be lighter to be fuel-efficient.

Such Japanese companies as Toray Industries Inc. have a high presence in the global market for such materials. The cooperative project involving industry, government and academia is designed to boost Japan’s international competitiveness in the field.

Output to be maintained


Toyota Motor Corp. said Friday it will maintain output at half capacity in Japan from May 10 to June 3 amid a supply crunch due to the March tsunami disaster.

The world’s No. 1 automaker said it still remained unclear when the company would return to full production here.

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