Aisin Corporation

President Trump's announcement of a 50% tariff on Canadian-made vehicles and parts is expected to hit Japanese automakers. Major companies have built supply chains spanning the US, Canada, and Mexico to produce for the US market, and with the review of the USMCA, which is the basis for this, dragging on, the deteriorating US-Canada relationship is making it difficult for them to respond. Toyota produces Lexus and RAV4 models at its Canadian plant, while Denso and Aisin also export parts. Honda exports about 300,000 units of models like the Civic annually. With an additional 25% tariff already in effect, the industry is crying out that 'businesses will become unviable.' Companies are pushing to strengthen local production, but the conditions for restructuring their supply chains are not in place, leaving them in a bind.

A 7.1-magnitude earthquake in Japan's Kyushu region has disrupted vehicle and component production at the country's leading automakers. Toyota temporarily halted production at three plants in Kyushu and one in Aichi Prefecture, while Nissan suspended operations at its two Kyushu vehicle plants and Mitsubishi Motors halted a plant in Okayama. Major supplier Aisin Corporation also idled facilities in the region. The production suspensions could result in the loss of up to 20,000 vehicles, and electronic component manufacturing including semiconductors has also been affected.

Toyota Motor announced on the 31st that it will suspend operations at its Tahara plant in Tahara City, Aichi Prefecture, which produces luxury Lexus vehicles, from August 3 to 7 due to parts supply disruptions caused by the Kumamoto earthquake. It also extended the shutdown at three plants in Fukuoka Prefecture until the 5th, while Daihatsu Motor and Nissan Motor are also prolonging production halts at their Kyushu plants, spreading the impact further. Aisin Kyushu, a Toyota-affiliated parts supplier, has halted operations at its Kumamoto plant after it was damaged, and because it produces critical components for car doors, the disruption could affect customers beyond Toyota. The multi-tiered structure of the auto industry means it is taking time to assess the situation at smaller parts makers with no direct transactions, and Denso is also investigating the damage status of its own suppliers.

Parts supply disruptions from the Kumamoto earthquake have forced Mitsubishi Motors to announce on the 30th that it will suspend production of some models at its Mizushima plant in Kurashiki, Okayama Prefecture, from the evening of the same day. The halt comes because Aisin Kyushu's damaged factory in Kumamoto City remains inoperable, cutting off the supply of core door components and other parts. The impact is also spreading to Daihatsu and Nissan. Toyota will keep its three plants in Fukuoka Prefecture idled through the 31st, while Nissan will partially suspend production at two plants of its manufacturing subsidiary in Fukuoka Prefecture through the 31st. Moves to halt auto production outside Kyushu are beginning to emerge.