Mazda, Honda and other Japanese car makers are making contingency plans for war following the US exile-or-else ultimatum to Iraqi president Saddam Hussein.
Go deeper with GlobalData
Mazda spokesman Mark Schirmer told Bloomberg News the company is preparing to ship cars to Europe through the Panama Canal or around Cape Horn if war disrupts traffic through the Suez Canal though the re-routing would delay shipments by as much as two weeks and raise costs.
According to Bloomberg News, Honda and its Japanese rivals are introducing measures such as stockpiling parts to keep overseas factories running if a war disrupts shipping. Honda, Toyota and Nissan have all been raising output abroad to shield themselves from currency fluctuations and speed up deliveries overseas, Bloomberg noted.
“Japanese automakers always have contingency plans to maintain supplies and they learned a lesson when the US west coast ports were on strike,” Credit Suisse First Boston Japan analysts Koji Endo told Bloomberg News.
Honda, which uses about 10% Asian-made parts in its overseas-built cars, said it was maintaining about two-weeks’ supply of spares at plants in England and Turkey as part of a global stockpiling strategy, Bloomberg News said, citing spokesman Tatsuya Iida. Nissan spokesman Gerry Spahn told the news agency that his company was also sticking to existing contingency plans but did not elaborate.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataToyota managing director Tokuichi Uranishi told Bloomberg News that the car maker has sufficient inventories at its European plants and dealers to last for at least three and a half months.
Meanwhile, BMW said war surcharges from shippers were a “possibility,” Bloomberg reported, adding that BMW said exports to Asia from Europe could take an additional two weeks if the Suez Canal is closed and it was forced to divert shipments around the African continent.
BMW doesn’t expect production to be affected. While it buys some parts from Asia, they are mostly electronic components that can be shipped by air, spokesman Linus Schmekel told Bloomberg News.
DaimlerChrysler and Volkswagen would not comment, the news agency said.
