Local car makers to take Lenten production break

Several domestic vehicle assemblers announced on Wednesday that they would temporarily stop production during the upcoming Lenten break as the global auto parts supply chain remains in disarray following the triple disasters that hit Japan. In a text message to reporters, Rommel Gutierrez, Toyota Motor Philippines Corp. vice president for corporate affairs, said the company “will have three nonproduction days in April (18th to 20th) due to temporary limitation in supply of production parts." “At this time, we plan to recover these nonproduction days in the coming months," Gutierrez said, adding that Toyota Philippines “will continue to monitor the overall supply situation in close coordination with Toyota Motor Corp. of Japan and our local suppliers." Toyota Philippines assembles the Innova and Vios models. In a statement, Anika Wycoco-Salceda, Ford Group Philippines assistant vice president for communications, said: “Starting this week, we are pulling ahead (with) 18 previously scheduled down days at our Santa Rosa manufacturing facility in the Philippines as a precautionary move to ensure we have parts availability going forward. The down days include an already planned week-long shutdown for the Easter holiday in the Philippines." “We are working with our suppliers on a daily basis to minimize any disruptions and are acting proactively and decisively to stay ahead of the situation. We have also pulled ahead previously scheduled downtime or taken temporary downtime in North America, Europe and Asia-Pacific," Wycoco-Salceda said. Ford Group Philippines churns out the models Escape, Focus and Mazda3 not only for the domestic market but also for export to some Asean countries. In a telephone interview, Jaime Recuenco, Mitsubishi Motors Philippines Corp. corporate services department senior manager, said the company would have no production from April 18 to 22 because it is their scheduled annual break, during which Mitsubishi Philippines’ facility in Cainta, Rizal undergoes preventive maintenance. “Our operations will resume on April 25," Recuenco said. Recuenco said that while parts come in “trickles," the company has enough inventory until next month. Mitsubishi Philippines assembles the sedan Lancer EX, the Adventure, the L300 and Fuso Canter trucks. Frank Nacua, Truck Manufacturers Association executive committee member, told reporters that assemblers of trucks and buses are also expected to temporarily halt production during Lent. “But after Holy Week, nobody knows" if production would slowdown or stop, Nacua said. These come on the heels of the Honda Cars Philippines Inc.’s announcement last week that it will slash its assembly operations by half beginning this month, citing the lack of parts and components mainly sourced from Japan. The industry is moving to address this problem, with the Chamber of Automotive Manufacturers of the Philippines Inc. (Campi) regularly gathering updates from its members, according to Homer Maranan, Campi secretary general. In a statement, Elizabeth Lee, Campi president, said that “the auto industry is starting to feel the effects of the disastrous tsunami that hit the northeastern part of Japan where some automotive operations to include parts and components plants are located. Although the extent of the impact differs from one brand to another, common problems include logistics and the disruption to the supply chain for some key parts." “Locally, so far, the supply of vehicles to date is ample to meet the market demand. Hence, buyers wanting to purchase vehicles will be able to do so without much difficulty at this point in time. Inventories in stock may range from one to three months depending on the various models each brand carries and their stock levels," Lee said. “The effect thus far is a slow down on the production of vehicles for the upcoming months after stock or inventories have been depleted. The slowdown is caused by the delay in shipment of parts and CKD [completely knocked down] packs. Assemblers are now managing production schedules to optimize the assembly of current CKD stocks. Some assemblers are likewise taking advantage of the usual respite of operations during the Holy Week holiday, tying in scheduled downtime to minimize disruption and maximize operating schedules moving forward," she said. “Part of the measures used to mitigate the impact on parts supply to include CKD packs are the switching of parts suppliers who are still unable to resume operations, to those who are less affected by the disaster—a move that was spearheaded by JAMA, the auto association in Japan. As a result, Asean governments are requested to accept vehicles whose parts are sourced from different suppliers who are equally compliant with required standards to be accepted even prior to obtaining type approvals for the specific parts," Lee said. “‘The need to resume and ramp up mass production of vehicles is of utmost importance as it affects not only the business and the brand, but more importantly, the livelihoods of many of the industry’s workers. As the integrated supply chain runs deep and wide, the effect of each day a singular plant is shut down, redounds to billions in losses. Hence, everything possible is being done to resume operations in the fastest time possible," she said. “The full impact is still yet to be assessed. Earthquakes/aftershocks continue to occur. Rolling blackouts are common since electricity/power supply has likewise been affected and hampered. However, all brand makes are putting in great efforts to help suppliers resume operations given the current limitations as well as seek and utilize alternative solutions to lessen the gap and supply the parts needed for global operations—to include those in the Philippines. We fully support and understand the situation Japan is currently faced with. We are likewise encouraged by the local support of our customers and the government during these times," Lee said. — TJD, GMA News