THAILAND: Vehicle assembly halted as floods hit supplies
By Chris Wright | 12 October 2011
Massive flooding which has hit parts of Thailand has disrupted vehicle production in the country and halted supplies getting through to factories.
Many carmakers are located at Rayong, south of Bangkok on the Gulf of Thailand. Ford said it suspended production at its facility although it had not been directly affected. It said in a statement that it expected to halt assembly for 48 hours to make a full assessment of inventories and logistics.
Toyota also suspended production at its Thai plants while Honda Automobile has closed its plant at an industrial estate in Ayutthaya Province, the area most severely hit by the floods.
Other carmakers affected include General Motors, Nissan and Mazda. The north of Thailand, the northeast and central plains have been badly affected by heavy monsoon rains, floods and mudslides. Bangkok, just two metres above sea level, is in danger as water overflows from reservoirs in the north.
Thailand's Finance Ministry has estimated the initial cost of damage at US$2.2bn and expects economic growth this year to slow to 3.7% from 4%.
The eastern seaboard of Thailand, home to refineries, petrochemical plants and car factories, has not been directly affected by the floods, but the centre of the country, including Ayutthaya province, is one of the worst hit areas and has plants production electronic goods and parts, hard disk drives and cars and parts.
Honda in Autthaya is most at risk. A Honda spokesman said that cars at the facility “appear to be floating." The company is unable to fully assess damage as the area has been evacuated.
Honda's Thai plant supplies parts to other factories in the region, so the damage could affect its supply chain and hurt output elsewhere.
Toyota’s three Thai plants, which account for around 8% of its global production, will be closed at least until the weekend because of a shortage of parts.
Nissan said its plant will operate normally until Thursday although there is a question mark beyond then.
Sectors: Vehicle manufacturers, Vehicle manufacturing
Companies: Honda, Toyota, Ford, Nissan, General Motors, Mazda
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