Saab production not affected by the tsunami in Japan but Volvo down to one week supply of parts

UPDATED April 1.

Less than two weeks after a catastrophic earthquake and tsunami in Japan, car production is being affected worldwide. Some car production is unaffected, at least for now, but Volvo is down to one week supply of some parts (as of March 28). The Swedish financial website, webfinanser.com, reports that Saab is initially unaffected as it has merely seven Japanese suppliers, all located in the south of the country. An additional 15 Japanese suppliers supply Saab for accessories and aftersales replacement parts. The northeast part of the main island of Honshu was affected by the tsunami. However, the Swedish source did note that these suppliers obtain parts from companies located in different regions of Japan. The Saab 9-3 uses an Aisin Warner automatic transmission. The company producing the transmission is a joint venture between Aisin Seiki and Borg Warner and obtains parts from multiple suppliers.

One component that is increasing causing concern is mass airflow sensors. Some Saabs use this component sourced from Bosch, a German based company. The sensor, located near the air filter housing, measures the air intake of the engine. Many car companies source their mass airflow sensors from Hitachi.


Mass airflow sensor

Hitachi has several key factories in Ibaraki prefecture that suffered extensive damage with collapse of walls and ceilings in some factories. The Sawa plant makes mass airflow sensors and other engine sensor components. Hitachi reported that production will not resume soon in some of those plants. Hitachi has a 60% market share for mass airflow sensors worldwide. Bosch and Siemens are two other companies with significant market share of the component.

Outside of Japan, GM has halted production at its Shreveport, Louisiana (United States) factory. Opel stopped production for one day earlier this week and will stop production for an additional day at plants in Zaragoza, Spain and Eisenach, Germany. The Zaragoza shutdown was reported in SaabWorld three days before the Wall Street Journal reported it. In France, production of Peugeot 207, Citroën C3 and other models will be slowed to conserve parts due to a stockpile of only about 10 days under normal production rates for this component.

LCD displays, silicon wafers, and chips are also expected to be in short supply though only mass airflow sensor shortages are cited as reason for reduction or halting of production outside Japan. Automobile parts tend to be regionally sourced but certain key parts are produced outside the region. Approximately 60% of parts in the Saab 9-3 are produced in Germany and Sweden. North America accounts for about 1% of the part content.

UPDATE: Ford and Chrysler has stopped taking orders for certain colors due to a shortage of Xirallic. The compound is supplied to paint companies, which are suppliers to the car companies. Xirallic was developed by the Japanese subsidiary of Merck KGaA, a Darmstadt, Germany based company unrelated to the Merck pharmaceutical company. The pigment that contains glass flakes to make paint shiny. Merck's Onahama plant suffered from some earthquake damage and lost electrical power and water. It is expected to take four to eight weeks to restart once access to the plant is possible. However, it is 45 km (28 mi.) from the Fukujima Daiichi nuclear reaction and within the evacuated exclusion zone.

Ford is having problems with certain shades of red and black while Chrysler is having supply problems with additional colors. The supply chain of parts is complex. While a certain supplier may not be in the affected area of Japan, some parts or components that the supplier uses are affected. This results in uncertainty for the automotive and other industries worldwide as the supply chain has increasing become more complex in recent years.

BMW, Toyota, and General Motors use Xirallic but have not yet announced paint supply problems.

UPDATE 2: Additional paint details added to the story.

Further reading: Sensor-Chip Shortage Hits Auto Makers - WSJ.com , asahi.com¡ÊÄ«Æü¿·Ê¹¼Ò¡Ë¡§Nuclear crisis forces firms to shift production from quake-hit region - English , Volvo och Saab beroende av skalvdrabbade leverantörer | Webfinanser - nyheter aktier it lyx bil nöje spel mobil räntor taxeringskalender, http://www.bloomberg.com/news/2011-0...-shortage.html http://content.usatoday.com/communit...ts-shortages/1 http://www.bloomberg.com/news/2011-0...for-weeks.html http://www.morningstar.co.uk/uk/mark...34292890284148 http://online.wsj.com/article/SB1000...626319082.html photo: public domain/GFDL