Japan Industry to Improve Automobile Supply Chain

Japanese government would standardize automotive special steel, other materials and parts for better automotive supply chain. Ministry of Economy, Trade and Industry held on Thursday first meeting on automobile industry strategy for Japanese economy growth. The members including president of Toyota Motor sought common materials and parts to improve the supply chain along with the cost saving.

The members include Toyota’s president Akio Toyoda and officials from automakers and automotive parts makers and archers from universities. They try to make solution on the supply chain for recommendation to the government when the major earthquake damaged the supply chain.

The members try to improve the competitiveness of the suppliers with Japanese base by standardizing the parts and materials for lower supply risk in emergency period and for lower cost structure. METI expects the effort could avoid offshore shift of the suppliers. The standardization would benefit Special steel makers when they have to make products with many specifications depending on the parts and users.

Japanese automakers and automotive parts makers decided power peak cut shift in July-September, chairman Toshiyuki Shiga of Japan Automobile Manufacturers Association said at monthly press conference on Thursday. They operate on Saturday and Sunday and stop the operation on Thursday and Friday at all plants in Japan in the quarter for power peak cut during business days when the government seeks 15% reduction of power consumption in summer under limited availability of power supply.

The automobile industry started the study for plants around Tokyo and Tohoku. However, they expanded the area to all Japan when Chubu Electric Power stopped operation of Hamaoka nuclear power station. Japanese steel makers started to revise the plan for production, shipment and delivery timing.

Japanese automakers increase the production level at domestic plants in June when the parts supply gets normal. Japanese truck makers try to normalize the production level in June and major passenger car makers increase the production in July-September to 80-90% level of before the earthquake.