Thailand Floods – Worst in 50 Years – latest Tragedy to Hurt Auto Industry as Honda, Toyota and Ford Production Disrupted

AutoInformed.com

Trucks run in deep water, but auto plants don't.

Thailand has been inundated by floods, the worst it’s estimated in at least 50 years. Aside from the real human tragedy costing hundreds of lives, once again the auto industry is negatively affected since Thailand has an annual vehicle production capacity of almost 2 million units, extensive exports, as well as numerous auto component parts manufacturing operations.

The disruptions will also have some unknown effects on production in other countries, which will become clearer during the next few weeks.

Of the 90 provinces in Thailand, 26 experienced floods, with auto production locations hard hit in Ayutthaya and Pathumthani provinces. Ayutthaya and Pathumthani provinces have about 40 auto parts suppliers working for most assembly plants in Thailand

A Honda assembly plant in Ayutthaya has been the most affected, stopping production, according to consultancy Frost & Sullivan. U.S. Honda is likely to have a production loss of about 10,000-15,000 units with the closure of its plant for about 5 weeks.

AutoInformed.com

A Honda assembly plant in Ayutthaya is under water.

U.S. Honda operations will not be affected, a Honda spokesperson told AutoInformed. Honda group companies will provide approximately ¥280 million toward the relief and recovery efforts in Thailand where it has been doing business for 47 years.

AutoInformed.com

In 2010 roughly 900,000 vehicles – 55% of total vehicle assembly in Thailand – were exported.

Toyota has also stopped production while it sorts out supply problems. Toyota and Isuzu are likely to lose the next 2-3 weeks of production from parts shortages, with losses estimated at 30,000-35,000 and 10,000-15,000 units, respectively.

Ford has resumed passenger vehicle production, but its new Ranger pick-up just introduced is on hold.

General Motors appears to be the automaker least affected since its plant and suppliers are outside the flood affected regions.

In 2010 roughly 900,000 vehicles – 55% of total vehicle assembly in Thailand – were exported. The main export regions include Australia, New Zealand, Europe, Middle East, Mexico, South Africa and Brunei. Models exported now from flood affected makers include Honda Jazz, Civic, City, Accord, the Toyota Hilux pick-up, and the Ford Ranger pick-up.

About Kenneth Zino

Ken Zino is an auto industry veteran with global experience in print, broadcast and electronic media. He has auto testing, marketing, public relations and communications expertise garnered while working in Asia, Europe and the U.S.
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