Major automobile manufacturers have started formulating self-imposed rules over parts purchases to avoid a frantic scramble among firms competing for essential components amid expected shortages caused by the Japanese earthquake and tsunami, it was learned Thursday.
The cooperation was sparked by the anticipation of a serious lack of semiconductors as soon as this summer, according to industry sources, who suggested other industries would likely take similar action.
Honda Motor Co. and other major carmakers have gradually restarted automobile production at domestic factories this week, but some parts are in short supply because of damage incurred by many component makers in the devastating March 11 earthquake and tsunami.
To avoid a purchase war over car parts, major automakers, including Toyota Motor Corp., Nissan Motor Co. and Honda, have begun discussions over how to share the available supply, the sources said. The prime target for the self-imposed purchasing rules is expected to be semiconductors for automobiles, which are known as microcontrollers and are used in automobile engines and brakes, but other parts will likely also be included.
Renesas Electronics Corp. holds 42 percent of the global automobile microcontrollers market. The company's main factory, in Hitachinaka, Ibaraki Prefecture, was knocked out of commission by the earthquake, and a supply shortage is widely seen as inevitable.
To deal with the looming problem, the auto industry has begun working on a plan to set purchase amounts for semiconductors for each company based on past order records, the sources said. U.S. and European automakers that buy parts from Renesas are also expected to be part of the discussions.
Since Renesas' microcontroller stock will probably run out by the end of May and the firm expects it will only be able to partially restart production in June at the earliest, automakers are trying to set the parts-sharing rules soon, the sources said.
This would not normally be allowed under Japanese antitrust law, but the nation's Fair Trade Commission has decided it would not apply the law strictly in this case, given the unique problems posed by the earthquake. Given the agency's stance, other manufacturing industries are expected to formulate similar rules, the sources said.
It is projected that the shortage of semiconductors and other parts will be long lasting. According to the Japan Electronics and Information Technology Industries Association, which counts about 70 semiconductor makers among its members, factories' operation rates will have to be reduced to about 80 percent of normal levels to achieve the 25 percent reduction in power consumption from last summer that has been requested by the government.
Operation rates of major manufacturers are expected to decline to between 37.5 percent and 50 percent of normal levels unless they move their production bases to western Japan or use private electricity generators, measures likely to be taken by only a small percentage of the nation's manufacturers.
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