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Japanese carmakers, recovering from March tsunami, again beset by Thai flooding

Vehicles are submerged in floodwaters at a Honda automobile factory in the Rojana industrial district in Ayutthaya province, central Thailand. The factory makes nearly 5 percent of Honda vehicles worldwide.

Associated Press photos

Vehicles are submerged in floodwaters at a Honda automobile factory in the Rojana industrial district in Ayutthaya province, central Thailand. The factory makes nearly 5 percent of Honda vehicles worldwide.

TOKYO — Honda manager Hideto Maehara has swapped his car for a rubber boat to reach the company's auto plant north of the Thai capital. A month after being inundated, the factory that makes nearly 5 percent of Honda vehicles worldwide is still under 5 feet of water.

The understandably frazzled Maehara acknowledged that the prospects for the plant's recovery are anyone's guess until floodwaters that have killed more than 500 people in Thailand since July, and caused billions of dollars in damage to industry, subside.

"The whole area is now like a lake," he said this week.

Among Japan's automakers, Honda has been the worst hit by the Thai flooding — a disaster that arrived just as automakers were recovering from the production slide caused by the March 11 tsunami in northeastern Japan that wiped out parts suppliers. Others such as Toyota and Mitsubishi have also suffered.

The disaster is another reminder of how vulnerable carmakers and other manufacturers are to supply disruptions since their global operations rely on a myriad of sophisticated parts. Car production as far away as North America has been scaled back as the creeping floodwaters put suppliers out of action. Yet the losses are expected to be noticeably less than those caused by the tsunami.

The calamity has also revived predictions that foreign businesses might flee Thailand, which has endured crisis after crisis — man-made and natural — in the past decade.

There is yet no hard evidence to support those assertions, while Japanese automakers, who rank among the biggest investors in Thailand, have said they remain committed to keeping the country as their main production base in Southeast Asia.

Toyota, Japan's biggest automaker, said Thursday it will resume production at its Thai plant Nov. 21, indicating that Toyota may be able to bounce back from the flooding far more easily than it had from the March earthquake and tsunami. Toyota's production in Thailand was stopped Oct. 10.

As of Nov. 12, the floods had cost Toyota 150,000 vehicles in lost production, nearly 90,000 of those in Thailand, and 40,000 in Japan. The floods were affecting supplies of some 100 items, including resin and electronic parts, according to Toyota.

Toyota senior managing officer Takahiro Ijichi insisted that the disruption from the Thai problems was small compared to what Toyota faced after March 11, but he was quick to acknowledge the uncertainty.

"Before Thailand, we thought we would be able to outdo our production forecast," he told reporters and analysts this week. "Now, we just don't know."

Mamoru Katou, auto analyst at Tokai Tokyo Research, said lost vehicle production from the Thai problems may total about 250,000 globally — far fewer than the 700,000 from the March disaster — but they were coming on top of each other, he said.

"Let's hope there isn't a third disaster," he said, adding that Honda has the toughest challenge, partly because it has fewer models than Toyota or Nissan.

Japanese carmakers, recovering from March tsunami, again beset by Thai flooding 11/10/11 [Last modified: Thursday, November 10, 2011 9:13pm]
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