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.