Honda Motors face logistics problems due to monsoon floods in Thailand

After last year’s Earthquake and Tsunami, Honda Motor Company, Ltd. are struck with another catastrophe that might hinder its annual production of cars especially the most anticipated new 2012 model, Honda CR-V in the US and Canada.

The company is facing shortage of components at its Japanese manufacturing plants due to the Monsoon flooding in Thailand. Although several components are manufactured in the US but the rest are imported from Thailand and Taiwan.

The latest floods in the Far East Asia have engulfed Thailand and its close vicinity. Therefore, Honda is facing tight inventory problems for the mass production of its vehicles like the 2012 Civic and CR-V.

However, manufacturing units in North America; in the US and Canada are making up to the deficiency in the production and US sales chief John Mendel assured the delay will be for a finite period of time unlike last year.

The 2010 earthquake and the following Tsunami that hit Japan brought catastrophic damages to Honda the most. However, the company overcame the financial and production ordeal later this year. Honda’s stocks faced a 2.3 point-loss in the US stock markets
in 2010.

Honda left all that upheaval damages in the rear mirror but the monsoon flood delays are creating obstacles in their production.  Honda official said the company’s income fell 56 percent in the third quarter of current fiscal year.

The US and Canadian plants have stepped forward and it is expected that the shortage of components will be overcome in the coming days. However, if the shortage prolongs, the North American market will be the most affected by it as the CR-V and Civic are
most endeared brands of Honda among the masses.

The company has been running a patch of bad luck of late. They did not avail the opportunity of 2009 crisis that devoured the US automobile industry including the giants like General Motors and Chrysler. In 2010, they followed the same footsteps and squandered
the chance of gripping the market when Toyota faced a recall crisis.

A 2009 Lexus ES350 crashed and all four occupants die at the spot. After a string of denials of manufacturing defect, Toyota was forced to pull back 7.4 million vehicles in two recalls in 2010. Toyota dealers lost $54 Million a day due to the corporate ordeal.

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Posted by Usman Khalid on Nov 1 2011. Filed under Business. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry