Automakers expect to avoid losing output amid resin shortage, AutoNation says
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DETROIT (Bloomberg) -- AutoNation Inc., the largest U.S. retailer of new vehicles, said automakers expect to avoid losing output amid a shortage of a key resin used in fuel and brake parts.
Automakers see the shortage of the resin PA-12, also called Nylon-12, as "nothing like" the challenge of last year's tsunami in Japan and floods in Thailand that curbed production and vehicle supplies, AutoNation CEO Mike Jackson said today.
The retailer boosted prices and used-vehicle sales last year as the natural disasters limited shipments from Toyota Motor Corp. and Honda Motor Co.
"Production for the next four to six weeks has all been confirmed by the various manufacturers, and they've told us that they will find solutions for the period beyond that," Jackson said today. "Everything's smooth sailing. If there's a moment of truth it would be in four to six weeks when they can't confirm production schedules."
AutoNation forecasts U.S. light-vehicle sales will be "mid-14 million units" for the industry this year, up from an estimate of about 14 million on Jan. 26.
Industrywide deliveries were 12.8 million in 2011. April sales will be released next week.
General Motors, Volkswagen AG, Ford Motor Co. and Chrysler Group LLC, along with motorcycle maker Harley-Davidson Inc., drafted a plan on April 23 to expedite their parts-validation processes to speed the use of alternatives to counter the resin shortage.
A follow-up meeting to approve the plan is scheduled for April 30, according to the Automotive Industry Action Group.
Harley-Davidson has a few parts that use the nylon in short supply, Chief Executive Officer Keith Wandell said in an interview. The Milwaukee-based company doesn't anticipate cuts to production, he said.
Resin is in short supply after the March 31 explosion at chemical maker Evonik Industries AG, which halved global capacity to make Nylon-12. Evonik's Marl, Germany, factory made a base ingredient used in the resin called cyclododecatriene, or CDT, and supplied the material to other makers of Nylon-12, including France's Arkema SA.
Switzerland's Ems-Chemie Holding AG and Japan's Ube Industries Ltd. also produce Nylon-12.
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