Honda warns of production halts as Japan car exports slump

Japanese shipments fell 4.5% year-on-year in February due to Covid-19, port congestion, semiconductor shortages and severe winter weather

Honda warns of production halts as Japan car exports slump
The Honda Legend, equipped with sophisticated autonomous driving technology, is unveiled in Tokyo on March 4. The Japanese carmaker said it would halt production next week at a majority of North American factories. Photo: Reuters 

(ATF) Honda Motor said on March 16 it would temporarily suspend some production next week at all US and Canadian plants citing supply chain issues, as the latest trade data showed a slump in Japanese car exports.

Some of the disruptions are caused by the continuing coronavirus pandemic, Honda said.

A spokesman for the Japanese carmaker said it would halt production next week at a majority of North American factories, citing "the impact from Covid-19, congestion at various ports, the microchip shortage and severe winter weather over the past several weeks".

The company would not specify the number of vehicles affected. "Purchasing and production teams are working to limit the impact of this situation," the spokesman said.

Honda said "the timing and length of production adjustments could change" and added that when production is suspended Honda workers "will continue to have the opportunity to work at the impacted plants."

US DELIVERIES DECLINE

US-bound exports declined 14% year-on-year in February, dragged down by fading shipments of cars as well as aircraft parts, after a 4.8% drop in the prior month.

"With the current shortage of semiconductors reducing vehicle production both in Japan and overseas, as observed in February, we caution that exports of automobiles and parts could weigh on exports as a whole in the first half of 2021," said Kazuma Maeda, an analyst at Barclays. 

Overall, Japanese exports fell 4.5% year-on-year in February. Meanwhile, imports rose 11.8%, the first increase in 22 months. Imports from China surged 114.5% – from a low base – after halving in 2020 due to the Covid-19 outbreak.

Masaki Kuwahara, senior economist at Nomura Securities, said he thought export trends would tick upwards again as "the Chinese economy will resume recovery once a renewed rise in infections fades".

With reporting by Reuters

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