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Toyota and Honda delay restart amid part supply issues | |
(about 6 hours later) | |
Japanese carmakers Toyota and Honda have delayed plans to restart production saying that they cannot get the parts they need. | |
Toyota will not restart production before 26 March. Honda Motors says it has extended a production shutdown until at least 27 March. | |
The firms have halted operations after Japan was hit by a deadly earthquake and tsunami. | |
Analysts said the shutdown would cost companies millions of dollars a day. | |
A spokeswoman for Honda said that the company now expects delivery of new vehicles in Japan to be delayed. | |
Different pace | |
Assembling a car requires thousands of parts to be put together. These are provided by different suppliers. | Assembling a car requires thousands of parts to be put together. These are provided by different suppliers. |
"Each supplier has to be able to reach the levels before the devastation to reach the full production plan," said Vivek Vaidya of Frost & Sullivan. | |
As different vendors get back on track at a different pace, the supply of parts will also be inconsistent in the short to medium term, analysts said. | As different vendors get back on track at a different pace, the supply of parts will also be inconsistent in the short to medium term, analysts said. |
There might be an excessive supply of parts for one model of the car, while the other models might face a shortage. | There might be an excessive supply of parts for one model of the car, while the other models might face a shortage. |
According to analysts this will mean the manufacturers will have to make some tough choices. | According to analysts this will mean the manufacturers will have to make some tough choices. |
"They will have to get the product mix correct," said Mr Vaidya. | "They will have to get the product mix correct," said Mr Vaidya. |
"Getting that right will be a challenge," he added. | "Getting that right will be a challenge," he added. |