Tsunami has impacts on automobile production in Vietnam

The earthquake and tsunami catastrophes which occurred in Japan one month ago, have had initial impacts on Vietnam’s automobile industry.

Toyota Vietnam, one of the biggest automobile manufacturers in Vietnam, late last week announced that it will cut the car output at its factory in the Vinh Phuc province, due to the impacts of the earthquake and tsunami in Japan one month ago.

Though the duration for the temporary production cutting has been scheduled for a short time from April 25, 2011 to June 3, 2011 as announced, analysts, with what they can see on mass media about the catastrophes, believe that it will be not easy to resume the production.

Toyota Motor Vietnam has the assembling capacity of 30,000 cars a year. With the spontaneous program on cutting output, which lasts nearly 40 days, the number of cars to be churned out will decrease by 2500. The sales of Toyota Vietnam’s best selling models; Toyota Vios and Corolla Altis, will surely be influenced by the output cut.

Though Toyota Vietnam has drawn up a concrete production plan in order to maintain the general operation of the factory for the above duration, the production cut will affect the production of the enterprises which make car parts, and the sale of Toyota Vietnam’s sales agents, as well as the consumer’s car demand.

Akito Tachibana, General Director of Toyota Motor Vietnam, said the company will consider the car part supply capability, in order to set up a reasonable production plan which allows to resume the current output at the soonest possible time.

Vietnamese customers have been reassured that they still have other opportunities to purchase cars from other Japanese manufacturers, including Honda Civic, assembled in Vietnam by Honda, or Mazda 3, imported under the mode of a complete built unit (CBU) by Vina Mazda.

Also, in an effort to reassure the customers who purchase CBU cars from Japan, the Japan Automobile Manufacturer’s Association JAMA, has affirmed that Toyota, Honda, Nissan and 10 other Japanese automobile manufacturers will have their cars measured in radioactive concentrations before the cars are put into ships for export. The announcement aims to ease the anxiety of customers about the radioactivity, once the nuclear crisis at Fukushima Daiichi plant has not come to and end.

Prior to that, in late March 2011, Honda Vietnam said the occurrence in Japan would not in no way affect the operation of the company. However, Honda Vietnam, which imports some car parts from Japan, still keeps collecting information from Honda Japan. Honda Japan said it will have to stop exporting car parts from some factories, but this will not affect the production plan of Honda Vietnam. However, executives of Honda Vietnam are considering seeking other suppliers in order to maintain production.

Meanwhile, Ford Motor, another big automobile manufacturer in Vietnam, has announced the plan to launch Fiesta, a small size model, the rival of Toyota Vios, into the market from early May 2011. The launching of the new model at the time when Toyota Motor Vietnam meets some difficulties in car parts supplies, is believed to create big changes on Vietnamese automobile market.

In related news, the Ministry of Transport is completing the plan to apply the new emission standards for domestically made and imported automobiles and motorbikes. If the plan is approved, Vietnam will skip the application of Euro 3, and will apply Euro 4 standard from January 1, 2017.