Car dealers brace for disrupted supply

TOKYO -- Rough road ahead! U.S. vehicle shoppers will have difficulty finding some Japanese and American models in certain colors, thousands of American auto plant workers will likely be told to stay home, and companies such as Toyota, Honda and others will lose billions of dollars in revenue.

More than two weeks since the 9.0 earthquake and ensuing tsunami disrupted auto manufacturing and at least one port in Japan, inventories of crucial car supplies -- from computer chips to paint pigments -- are dwindling.

Much of Japan's auto industry -- the second largest supplier of cars in the world -- remains idle. Few plants were seriously damaged by the quake, but with supplies of water and electricity fleeting, no one can say when factories will crank up. Some auto analysts said it could be as late as this summer.

Because parts and supplies are shipped by water, the real drop-off of supplies has yet to be felt by factories in the United States, Europe and Asia. That will come by the middle of April.

"This is the biggest impact ever in the history of the automobile industry," said Koji Endo, managing director at Advanced Research Japan in Tokyo.

The disruption is being felt by U.S. automakers. When General Motors briefly shut a pickup plant in Shreveport, La., due to a lack of parts, it caused the partial closing of a factory in upstate Buffalo that supplies engines for those trucks. Sweden's Volvo has warned that its production could be disrupted because it is down to a week's worth of some parts.

Car buyers will soon see higher prices and fewer choices. Some car colors will be harder to get because a paint pigment factory in Japan was damaged and shut production.

As a result, Ford is telling dealers to stop ordering "tuxedo black" models of its F-150 pickup and Expedition and Navigator SUVs. It's also shifting away from some reds. The moves are precautionary, Ford said. Chrysler has stopped taking orders for vehicles in 10 paint colors.

Customers also face rising prices for models like Toyota's Prius, which is made only in Japan. Fears of falling supply have some dealers driving a hard bargain with customers who want the fuel-efficient hybrid as gasoline prices rise. Recent discounts of 5 to 10 percent on that car are disappearing.

Japanese carmakers, who have shut most of their domestic plants, are warning that some of their overseas factories will stop running, too, in an effort to conserve supplies. Toyota and Honda expect shutdowns at North American plants. Honda said production could be interrupted after April 1. Most of its parts are made in the region, but a few critical ones still come from Japan.

The uncertainly has suppliers, automakers and dealers scrambling. And it exposes the vulnerability of the world's most complex supply chain, where 3,000 parts go into a single car or truck. Each one of those parts is made up of hundreds of other pieces supplied by multiple companies. All it takes is for one part to go missing or arrive late, and a vehicle can't be built.

Companies will shut down plants as soon as some parts start running out, which could start happening in the next four to six weeks, said Paul Newton, an analyst with IHS Automotive. "You will see it happen almost daily."

IHS Automotive predicts that one-third of daily global automotive production will be cut. That means about 5 million vehicles worldwide won't be built, out of the 72 million vehicles planned for production in 2011.

Some car manufacturers, meanwhile, may shift operations to deal with the crisis. Nissan, for example, is thinking of moving some engine production to Tennessee from Japan.