Japanese car majors Toyota Kirloskar and Honda Siel are looking for alternative component sources as a flood crisis in Thailand, a key component supplier in Asia, has hit supplies and disrupted production at their facilities in India.
Toyota, which is estimated to incur a production loss of 800-1,000 vehicles or 8-10% of total output due to the supply disruption, is diverting spare parts meant for plants in Indonesia and the Philippines to keep up production for the waiting Innova and Fortuner customers in India.
Honda Siel, which has suffered an output loss of more than 60-70%, is in negotiation with alternative sources from China and Japan to bring back normalcy in production.
"Toyota Motor Asia Pacific has given India the top-most priority. It is helping us by sourcing and diverting components, meant for Indonesia and Japan, here to sustain our good growth. Through this arrangement we will have spare parts supply till the end of the month," said Sandeep Singh, deputy managing director, marketing at Toyota Kirloskar.
A three-month long crisis triggered by unusually heavy monsoon rains has left several hundreds people dead in Bangkok and disrupted industrial hubs mostly in northern and central Thailand, which will take at least a few months for them to resurrect.
Toyota imports some of the key engine components for Fortuner and Innova from Thailand, while Honda Siel imports under-body parts and electronic parts.
Toyota said supplies are secure till November end. In October, when the flood scenario worsened, the company had said supplies were secure till November 14. The supply scenario for Toyota post-November is likely to be known by the end of the month. The situation is far adverse at Honda Siel, which has been forced to stop production of its City sedan and Brio compact cars as it has run out of critical components.
"November was one of the worst months in terms of actual output and in December too the company would have hardly anything to produce," said people with knowledge. For Honda Siel, the waiting period for Jazz and Brio runs into 3-6 months and the company has already stopped taking bookings for Jazz. If supply constraints persist, it may stop bookings for Brio as well.
For Toyota, there is no impact on its small car Liva and the affordable sedan Etios, which forms more than 50% of Toyota's total sales in India. However, there is a 4-month waiting period for Innova and 4-6 months for Fortuner. ET learns that the output for Brio may be slashed by as much as 80-90% and the company may produce few hundred units just to keep the plant running and maintain manpower.
