SHANGHAI -- Ford Motor Co.’s Jim Farley expects no major impact on his company’s U.S. operations from the earthquake in Japan, but he warned that it’s too early to judge the full effect because expected vehicle shortages have yet to occur.
First signs of a shortage likely would appear in the ultracompetitive C segment, where the Ford Focus goes up against the Chevrolet Cruze, Honda Civic and Hyundai Elantra, said Farley, Ford’s global marketing chief.
“As far as the Japanese impact, it’s too early to tell. We haven’t really seen any impact because everyone’s inventories are still pretty plentiful,” Farley said last week on the sidelines of the Shanghai auto show. “Right now, it won’t have a material impact on North America.
“The only segment that is short now in terms of ground stocks seems to be the C segment, where the industry is around 30 days’ supply,” he said. “It’s too early to speculate how the industry will react to shortages because we haven’t seen it yet.”
But tight supply could lift prices, Farley noted. “If the stocks go below 30 days’ supply, then traditionally that’s when the market dynamics change,” Farley said. “Pricing goes up.”
Carmakers are bracing for shortages of some vehicles because of the global supply chain breakdown triggered by the March 11 earthquake in Japan. Parts shortages have forced production shutdowns at Japanese brands and are hitting U.S. companies, including Ford.
Ford still isn’t taking orders for vehicles in certain colors because the company lacks a paint pigment called Xirallic, the supply of which has been suspended because of quake damage to a factory in Japan.
Farley said Ford is working around that problem two ways: by leaning on inventories of up to 90 days for some models with Xirallic-based colors, and by reintroducing colors from Ford’s past.
Germany’s Merck KGaA, which operates the plant, aims to have it back online around June 1.
