Ahead: Months of tight supply

After weeks of anticipation, the industry is taking concrete steps to cope as the impact of the Japan quake hits North American shores.

Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co. have curtailed production in North America. General Motors has sent experts to Japan to work with troubled suppliers. Several automakers have restricted the vehicles, trim levels and parts their dealers can order.

AutoNation Inc., the nation's largest dealership group, is bracing for a 30 to 50 percent reduction in shipments of some Japanese brands and expects inventory disruptions to hit with full force in May and linger up to four months.

AutoNation plans to cut discounts on Japanese brands, shift marketing dollars to other makes and order more new vehicles from the Detroit 3 as it braces for a major shortage of Japanese vehicles.

The industry doesn't know yet whether its contingency plans will suffice. And a major calamity at the troubled Fukushima Daiichi nuclear plant could sweep away those plans. But so far, so good.

AutoNation CEO Mike Jackson, for example, said the retailer is making dozens of tactical moves to blunt the effects of the crisis. "We are staying at full speed ahead and plowing through this," Jackson told Automotive News.

By late last week, most dealers had seen little or no effect on inventories since the March 11 earthquake and tsunami knocked out production at many Japanese suppliers.

Tony Schnurr, COO at the Larry H. Miller Group of Cos. in Sandy, Utah, said the dealer group is keeping close tabs on the problem. But so far inventory has held up and parts managers aren't complaining of shortages. Said Schnurr: "We are not taking any drastic moves."

But AutoNation is putting in place a number of plans. Likely steps include:

-- Implementing a temporary hiring freeze at Japanese-brand stores

-- Suspending sales to rental fleets

-- Requiring manager approval before putting vehicles in loaner fleets

-- Accepting older vehicles than it previously did as trade-ins.

Some dealers have complained that Japanese and non-Japanese automakers haven't provided enough information on future availability to help them plan. Jackson said AutoNation is responding to intelligence gleaned from "countless" daily calls to automakers.

AutoNation hasn't loaded up on domestic vehicles -- yet. But Jackson said it probably will as shortages of Japan-made vehicles occur. So far the Detroit 3 have reported only minor snags, while Japanese automakers are suffering from disruptions at Japanese and U.S. plants.

At GM, a crisis team of several hundred employees in purchasing, manufacturing and supply chain management are identifying at-risk components and seeking replacements for affected parts, according to one analyst briefed by GM CFO Dan Ammann last week.

In Japan, Toyota will resume output at all factories on April 18, rather than on April 14 as it once planned, and at half of capacity. Production will halt after April 27 for the annual Golden Week string of national holidays. Normally output would resume on May 9, but Toyota hasn't decided on a production plan after the holidays.

In North America, Toyota will halt vehicle production on Friday and April 18, 22 and 25, with most of its powertrain and component factories following suit. Its Georgetown, Ky., plant will build cars on April 21, but other assembly plants will be closed that day. Toyota already had eliminated overtime and some Saturday production "in order to conserve parts coming from Japan," Bob Young, Toyota's North American purchasing boss, told Automotive News.

On average, around 85 percent of the parts and materials for the Toyota models built in North America are sourced from 500 suppliers here, the company said in a statement.

Honda has extended North American vehicle assembly cuts by an extra week, through April 22. Shortages of Japanese parts are expected to bring more production cuts after that. Honda went on half-time production schedules at most North American plants on March 29. Honda's plants in Japan have been shuttered since the quake.

John Mendel, an executive vice president at American Honda Motor Co., said he foresees parts shortages affecting the automaker's North American plants for "60 to 90 days ... that's my working number for now."

In a best-case scenario, Mendel added, the production cutbacks could be as short as 30 days. He later told dealers in a memo: "This remains a fluid situation, and any specific dates are speculation and not an official revised forecast."

In the memo, Mendel said Honda retailers would be unable to modify the trim or color of vehicles included in June vehicle allocations "due to the need for stable production planning."

In a separate memo, Mendel told dealers Honda would discontinue incentives for the 2011 Civic Hybrid and 2011 Insight hybrid on April 18. Both are assembled in Japan.

Honda doesn't want to create "excess demand for products that are already at low inventory levels" with incentives, because demand for fuel efficient vehicles is high and no Japan-made vehicles are being added to the pipeline, Mendel said.

Toyota told dealers in late March that it won't be able to replenish dealers' parts for at least a month. While Honda is not following Toyota's lead, it has set up its ordering system to detect whether a dealer is stockpiling a certain part in an effort to corner the market.

At Waldorf Chrysler-Jeep in Waldorf, Md., Service Director Rob Murphy said the fear of a repair-parts shortage is prodding him to inspect and fix Japanese trade-ins "ASAP" to stay ahead of any potential shortages or price increases.

Donna Harris, Ryan Beene, Mark Rechtin and Bloomberg contributed to this report