MI Ford Dealers and Toyota Dealers Learn about Thailand Flood-Related Supply Issues

Nov. 12, 2011 - PRLog -- DETROIT, M.I. – MI Ford dealers are learning it’s a tough week to be Ford. First, Consumer Reports released its reliability report which dropped Ford 10 spots to No. 20 on its list.
[Rewind: MI Ford Dealers Have an Uphill Battle: Ford’s Ranking Drops to 20]
Now, flooding in Bangkok, Thailand, and in surrounding areas has forced automakers’ suppliers to shut down as their factories are inundated with water. MI Ford dealers may not be directly affected, but there will be some slowdowns in production for Ford, which could possibly trickle down.
During an earnings conference call yesterday attended by Automotive News, Lewis Booth, chief financial officer at Ford, said, “Although our vehicle assembly plant is not affected, a number of our suppliers are.”  He noted production may drop by as many as 30,000 vehicles. “We are working closely with our affected suppliers to return to production as quickly as possible.”
Two other automakers have also been affected by Thailand’s flooding. Both Toyota Motor Corp and Honda are facing production delays just as both companies were completing their recovery from the Japan tsunami and earthquake. Toyota has canceled overtime shifts in North American plants and Honda has pushed back the launch of its redesigned Life Diva, a minicar available in Asian markets.
According to CNN, Toyota’s Thailand production capacity is more than 550,000 vehicles annually. Three plants have been shut down since October 10 and will continue to be closed through the beginning of November. IHS Automotive Industry forecasts daily Thailand output at a loss of 6,000 vehicles. Honda’s largest facility in Ayutthaya, which produces 240,000 vehicles a year, has been almost completely submerged in water. As a result, the IHS has noted, “It will be particularly difficult for Honda to restore its output quickly, in Thailand and globally, and it may be forced to revise its earnings estimates for the current fiscal year.”
Approximately 10,000 factories in Thailand have been affected by flooding, making automakers not the only ones affected. Computer producers including Lenovo Group Ltd., the second biggest PC maker in the world, are also going to lose significant production of vital hard disk drive components that will extend into the first quarter of 2012.
As one of the worst floods in decades, the rising waters have already claimed as many as 370 lives and the water shows no signs of receding. MI Auto Times will continue to monitor the situation to see what the local impact is for MI Ford dealers as well as all other brands.
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[Source(s): Automotive News, Reuters, Left Lane News, IHS Global Insights, CNN]