Japan's Earthquake

Japan’s Earthquake and Tsunami IMPACT ON AUTO MAKERS

"This is a one time shock and overall it will not have a long term impact on the global economy…”

"According to our estimates, the effect [on the Japanese GDP] will not be that large…”

The World Bank’s Chief Economist, Justin Yifu Lin, said on Wednesday that the tsunami in Japan will not have a long term impact on the world economy…

We are sure the Japanese economy will bounce back quick.

With reconstruction, Japan can increase its growth rate.

"We hope the world community will give assistance to the Japanese government.”

Friday's earthquake and tsunami left parts of Japan's economy "frozen", but analysts forecast that it will bounce back later this year.

The country's global

car

giants are expected to be amongst the worst

affected.

Cars waiting for export burn after an 8.9 magnitude strong earthquake on March 12, 2011 in Tokai, Ibaraki, Japan.

In the six months following the Kobe earthquake of January 1995, shares of Toyota, Honda and Nissan fell 22%, 35%, and 40% respectively, according to Tong Yang Securities, and needed up to 13 months to recover.

Toyota, Honda, Nissan and Subaru (Fuji Heavy Industries) have stopped operation in several of their factories after the 8.9 magnitude earthquake. Toyota has closed down 3, Honda has shut 2, Nissan has closed 4, and Fuji Heavy Industries, the maker of Subaru cars, has closed 5 factories.

Nomura suggested that annual operating profits at Toyota, Honda and Nissan would be dented by between 3% and 8% this year.

Firefighters hose down smoldering cars Saturday following Friday's devastating tsunami in Hitachi, Ibaraki Prefecture, northeast of Tokyo.

Some of the country's leading producers, including the world's biggest carmaker, Toyota, have closed all of their plants in the country.

According to Automotive News, Toyota dispatched 2 convoys of rescue vehicles -- 6 water tankers, 2-fuel tankers, and 9 cargo carriers -- to heavily-damaged northern Japan carrying food, water, and portable toilets. Toyota wanted to bring relief to an area where it operates 2 parts plants, as do 2 Toyota subsidiaries.

All 4 facilities had been shut down since the earthquake on Friday. The mission got some welcome news. A Toyota spokesman said there were no reports of deaths or injuries, though the plants themselves suffered some damage.

Toyota Motor Co said it will continue to halt operations at its 12 main assembly plants in Japan, extending the suspension until March 22. The

closure of the factories, since Monday, will result in lost production of

95,000 vehicles.

But it will restart production of spare parts on Thursday at seven plants near its base in Toyota City, central Japan, to be shipped to service centers for repairs to Toyota vehicles already on the road. From March 21, Toyota will also begin making car parts at the same plant for assembly factories overseas, the company said.

Honda Motor Co reiterated its plans to suspend all production in Japan until at least Sunday.

[ID:L3E7EE109]Honda manufactured 69,170 cars in January in Japan, where it made 24 percent of its cars.

Both Honda and Mazda announced that they were suspending production for the rest of the week. For Honda, it means the loss of 16,600 vehicles. Overall, HIS figures a global production loss of some 36,700 vehicles a day. That means more demand for used Japanese vehicles and hence higher prices.

Nissan Motor Co said output has been stopped at all four of its car assembly factories in Japan. Nissan made81,851 cars in January in Japan, where it manufactured 23percent of its vehicles.

"We've stopped production as of today," said Andy Palmer, Nissan's head of production, in an interview with BBC World Business Report in Tokyo, in line with its rivals.

Fuji Heavy Industries Co said all five of its car and car parts-related plants for its Subaru-brand vehicles in Gunma prefecture, north of Tokyo, will be closed until at least Sunday.

"It's not just our factories, it's also some of our suppliers. Some of our suppliers are even in the exclusion zone around the nuclear plant."

Mazda Motor Corp said they will suspend production at two plants in southwestern Japan until March 20, but have not decided on how to proceed after that.

None of the carmakers feel able to predict

when production will be resumed.

Goldman Sachs said in a report that rough calculations indicated the profit impact of stopping production for one day would be about 6 billion yen ($74.3 million) for Toyota and 2billion yen for Honda and Nissan.

In the U.S., Bank of America Merrill Lynch figures that big, publicly-traded car dealers have the most exposure to the Japanese catastrophe, because production halts mean fewer exports of Japanese brands, and thus fewer sales. AutoNation (AN, Fortune 500), Penske Automotive Group (PAG, Fortune 500), and Group One all get more than a third of their sales from Toyota, Honda, and Nissan. Overall, however, Bank of America figures the impact will be small -equivalent to one day of supply disruption over a full year.