As discussed last week on ValuePlays TV , Japanese auto production is going to be disrupted more seriously than initially thought. I think even the numbers below underestimate the eventual seriousness of the problem for Toyota and Honda. This is a huge opening for Ford (GM seems to be suffering from parts shortages) globally and I am thinking they walk right through the door.
Ford trades at 9X 2010 earnings, a discount to Honda’s 10X and Toyota’s 20X. Given current conditions and the outlook for the next 6 months, that gap ought to close and a good argument can be made for Ford trading at a premium to both given the problems at both Honda and Toyota now.
(Reuters) – Toyota Motor Corp ($TM) said on Wednesday it would delay the launch in Japan of two new additions to the Prius line-up, a wagon and a minivan, from the originally planned end-April due to production disruptions from this month’s devastating earthquake.
The world’s biggest automaker has suspended production at all of its 12 domestic assembly plants at least through March 26 and has estimated a production loss of 140,000 vehicles until then.
The automaker is just one of dozens, if not hundreds, of Japanese manufacturers facing disruptions to their supply chains as a result of the quake, the subsequent tsunami and a still-unresolved nuclear threat.
“We still don’t know the full extent of what can be done to substitute the affected parts,” Honda Motor Co ($HMC) spokeswoman Natsuo Asanuma said. Japan’s No.3 automaker has suspended production in Japan at least until March 27.
Japanese companies are not only reeling from damage to factories and suppliers in quake-hit northeastern Japan, but are also suffering from fuel shortages nationwide and power outages in the Tokyo area that are affecting production, distribution and the ability of staff to get to work.
Meanwhile, Ford Motor Co ($F) said on Wednesday it had felt no immediate impact or disruption from the earthquake in Japan this month and it was looking for strong growth in the Southeast Asia region (ASEAN).
The second-largest U.S. automaker planned to launch eight new products in ASEAN over the next five years, Peter Fleet, the president of Ford ASEAN, told Reuters in an interview.
“Right now, we have no immediate impact to our production in terms of our supply chain, but clearly you would expect us to be looking at that on a daily basis,” Fleet said.