It’s been nearly two months since Japan was hit by devastating earthquake and tsunami. Yet the fallout is only being felt now 9000 kilometers away in Hungary.
In another example of how increasingly complex and fragile the global supply chain has become, Magyar Suzuki, the Hungarian arm of the Japanese auto maker, said it has to move from double to single shift working this week as the supply of parts – including key electronics components – from factories in Japan affected by the disaster dries up.
As a result, production of vehicles at the Suzuki plant in Esztergom, 30 miles north of Budapest, has fallen by roughly half, to between 400-420 vehicles per day, Viktoria Ruska, Magyar Suzuki communications director, told beyondbrics.
The plant, which only last week celebrated the 20th anniversary of operations, sources numerous components, including engines and clutches, from Japan. While it held significant stocks of components when the disaster struck Japan in March, enabling it to continue production until the end of April, the shortages have now hit home.
“Basically, all Japanese supplies have been affected. We are seeking parts from our global network and alternative suppliers where possible. As far as we can see, we will be operating just one-shift during the first 3 weeks of May. We are ready to resume two-shift working at any time,” Ruska said.
Magyar Suzuki produced some 170,000 cars last year, of which all but 2,200 units were for export, including western Europe, Ukraine, Israel and Japan. The company has a similar production target for this year.
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Chart of the week: Japan, supply chain, and earthquake disruption, beyondbrics
Japan earthquake file, beyondbrics
Hungary file, beyondbrics
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