April 4, 2011
Filed under News
Earthquake’s effects on industry still unknown
The industry faces some uncertainty in wake of the deadly earthquake and resulting tsunami that hit Japan in early March.
The affected OEMs — Honda, Yamaha, Suzuki and Kawasaki — are still grasping the full effects on their companies as well as their suppliers, and are making day-to-day decisions on how to move forward.
Honda planned to reopen its motorcycle plant in Kumamoto, Japan, on March 28, two weeks after it initially shut down. The plant was not damaged, though it was unable to operate because of electricity shortages.
The company was the only one of the Big Four to report that an employee died during the earthquake. A 43-year-old man was killed when the wall of the cafeteria at the Tochigi R&D Center collapsed. Seventeen other employees were injured.
Though Honda’s motorcycle factory has begun working again, it’s unknown when operations will return to normal because some of the company’s Tier 1 and 2 suppliers have been affected, and the country is still grappling with uncertainty, Bill Savino, American Honda’s motorcycle press manager, told Powersports Business.
The future effects on North America are unknown. So far, there have been none; however, it has yet to be seen how the South Carolina ATV production facility, dealers and customers will be affected once issues trickle down. Executives from Japan, South Carolina and Ohio have been meeting daily to discuss the aftereffects of the earthquake.
“That (Kumamoto motorcycle) facility can put out a lot of product, and what I can say, even though they’ve been shut down, I don’t know what product was on the line when they shutdown,” Savino said. “It might not have been any of our (North American) product.”
The 2012 Gold Wing production is under way, and Savino is unsure if future operations will be affected.
“It’s a very fluid situation; we don’t know,” he said about overall operations. “I am sure in the next few days and weeks, many of these questions will be answered.”
To help in the recovery, Honda has donated about $3.7 million, 1,000 generators, 5,000 gas canisters and staff assistance using the equipment. It also has offered its 29,000 North American employees a donation option, which Honda will match dollar for dollar. As of March 23, employees had given $30,000. For dealers, suppliers, customers and the public, the company has set up a donation website at http://american.redcross.org/hondaacura-emp. All proceeds from both drives will be channeled through the American Red Cross.
Yamaha Motor Corp., U.S.A. expects some effects of factory closures to eventually reach North America.
“At this point, supply will be impacted. We do not know the extent of it,” said Bob Starr, general manager for national communications for Yamaha Motor Corp., U.S.A.’s motorsports group.
Fortunately, some of the company’s factories have begun producing partially assembled units again after being closed through March 23, according to Yamaha Motor Corp.’s website. Many of the powersports factories began limited production on March 24-28, but closed again on March 29.
“Our feeling is that the Japanese people are among the most resilient people in the world and are doing everything they can to get operations back to normal,” Starr reported.
As of March 23, employees in North America were still waiting to get more concrete plans from Japan. Starr believes the supply chain will be affected more than the company wants. “When our factories are closed, there’s nothing coming off the production lines,” he explained.
The company has started a matching fund donation program with the Red Cross. It has also donated a multitude of items in Japan, including: water bottles, blankets, portable toilets, generators, pre-packaged meals and surgical masks. PAS electric motorcycles also were dispatched to help.
“Obviously, the devastation is overwhelming in this situation. How can you help but feel the utmost sympathy for everyone who’s been affected?” Starr said.
Suzuki Motor Corp. has opened its two factories that assemble and machine motorcycles for limited production. Both are using stock components to complete bikes that are on the assembly line. The Toyokawa plant opened about a week after closure, and the Takatsuka plant resumed operations on March 24.
In North America, a “good supply” of recently produced motorcycles and ATVs is headed for dealerships, said Steve Bortolamedi, senior communications manager for the motorcycle and ATV division of American Suzuki Motor Corp. Future effects are unknown.
The company has donated 30 million yen, 50 mini-vehicles, 100 scooters, drinking water and medical supplies in Japan and plans to review local governments’ requests for more donations.
Kawasaki Heavy Industries, Ltd. (KHI) announced March 25 that its motorcycles production plant located in Akashi did not sustain damage, and no long-term stoppages are planned. Plants in Thailand and the United States continue in full operation.
“Obviously, the tremendous devastation that has occurred in Japan, and the subsequent humanitarian issues, must take precedence, but KHI will strive to maintain successful business operations during this difficult time,” the company said in a press release.
Kawasaki has donated 100 million yen, five wheel loaders and three crushing machines to relief efforts. Presidents of U.S.-based entities are collecting employee donations that qualify for the Kawasaki matching gift program, and the Kawasaki good Times Foundation is giving $50,000.
Other organizations in the industry are donating to recovery efforts.
Dealer invoice pricing website launched
SeeDealerCost.com, a website designed to show customers vehicle specifications and MSRP along with dealer invoice pricing, recently was launched.
Through the site, consumers can compare units and view details of each, much like auto industry sites provided by Edmunds and Kelley Blue Book. Users can register for the site, which allows them to save searches and request a quote from manufacturers that pay subscription fees for leads, or they can simply plug in a zip code and search anonymously.
Dave Taylor, a former marine industry executive who works for See Dealer Cost, says in addition to its main location, there are 600-650 URLs that feed the site. He says the site saw a steady flow of visitors before it was even announced and following some initial media coverage, “traffic exploded.”
The design of the site is intentionally spare, with a simple white background and links to specs, pricing and other information. Taylor says the developers worked to keep things “easy-to-use and intuitive.” The site’s motto, displayed on the top-right of each page, reads “No frills – just the info.”
The site, which is free to users, does not sell any products. Instead, Taylor says it will supply “the pertinent information we believe consumers are looking for to make an informed purchase decision.” It will generate revenue through display advertising and its lead subscriptions program.
The site has caused a stir in the marine industry, with the Marine Retailers Association of America (MRAA) speaking out against it, and several manufacturers refusing to participate. The MRAA argues the site does not accurately report dealers’ costs because it leaves out shipping, handling, preparation, tax, title and any of other fees, though that is indicated on the site. PSB