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Disaster In Japan: Automakers Halt Production

Posted in auto industry, Environment, News, Newsworthy, Oil Industry by Kurt Ernst | March 14th, 2011 | Leave a Reply |

An oil refinery burns in Ichihara. Image: Cranky5

The unimaginable scale of devastation in Japan has brought a temporary halt to production of Japanese automobiles. Mazda has announced a temporary shutdown of their Hiroshima and Hofu plants through the night shift on March 16, with further announcements on production expected on March 17. Honda is suspending production at most of their Japanese facilities through March 20, and an announcements are expected from Nissan and Toyota today. Although the bulk of Japan’s auto industry lies south of the most heavily damaged areas, the massive damage to the country’s infrastructure will impact the delivery of parts to automakers as well as the delivery of completed vehicles to ports. The Japanese Ministry of Economy, Trade and Industry has ordered rolling power blackouts to conserve electricity, and it may be some time before we fully understand the extent of the disaster’s impact on the world’s economy.

Japan is the world’s third largest consumer of crude oil, and the scope of the disaster will have a significant impact on the amount of oil imported into Japan. Experts expect to see a short term drop in consumption, as Japan gets refineries back on line and roads rebuilt. In the long term, it’s likely that Japan will see an increase in demand for crude oil, as it will take significant resources to rebuild the damaged infrastructure. In the short term, it’s likely that the crisis in Japan will drive down crude oil prices, but the long term results remain anyone’s guess.

Source: Autoblog Green

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