Japan Will Aid Auto Parts Makers Affected By Disasters

Auto parts maker supply chains were seriously damaged by the recent natural disasters in Japan. The Development Bank of Japan, the government-owned bank in the country, will launch a Y50 billion fund in June to aid car parts makers affected by the March tsunami and earthquake.

Major commercial banks will be asked to contribute to the fund.

An official for the bank said that negotiations regarding the fund are “in the final stage.” According to the plan, the Japan Auto Parts Industries Association will be presented with the investment. It will then distribute the money to its affected member companies and the many subcontractors they use.

There are 800 major car part manufacturers in Japan. These supply Japanese automakers with crucial parts like air conditioners and interior equipment. Manufacturers use about 4,000 subcontractors and nearly 20,000 sub-subcontractors.

Honda and Toyota were two Japanese automakers that deeply felt the impact of the disasters. Their April global production was cut in half due to crippled supply chains.

Facilities that generate electricity were also affected by the earthquake and tsunami. The hardest-hit areas of Japan are home to many key auto component manufacturers. Parts and power shortages affected production outside of Japan as well.

Toyota temporarily shut down plants or slowed output in China, Australia, Europe, and the U.S. By mid-April, production resumed at most plants but many are operating below capacity and this situation may continue due to anticipated summer power shortages.

UK consumers interested in purchasing a vehicle may be affected by the fallout. Some car buyers are waiting longer to receive vehicles purchased using car loans or cash if their autos are coming from Japan. Overall, consumers are being patient because they know that Japan is not to blame for the situation and it is making a huge effort to address the issue.