Malaysian car production may face Japan hitch

Last Updated: Mon, Mar 28, 2011 08:31 hrs

Malaysia's auto sales are on track to grow 2 percent to a record 618,000 vehicles this year, although production could be disrupted in coming months by parts shortages following Japan's earthquake and tsunami.

Sales last year in Southeast Asia's largest passenger car market rose 12.7 percent to 605,156 vehicles. For the first two months of this year, sales were up 4 percent, Malaysian Automotive Association president Aishah Ahmad said Friday.

The 2011 sales forecast of 618,000 vehicles will be reviewed in July when the situation in Japan is clearer, she said. There has been no impact on sales so far, Aishah said.

Japan's automakers suspended production after the massive March 11 earthquake and tsunami due to damage to suppliers' factories in northeastern Japan and power shortages. Most have only partially resumed production.

Japanese models account for about a third of vehicles sold in Malaysia, led by Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co. The three carmakers said it was too early to assess the impact on their Malaysian factories.

Ang Boon Beng, who heads Edaran Tan Chong which distributes Nissan cars in Malaysia, said the bulk of car parts are sourced from other Southeast Asian nations to take advantage of low tariffs under a regional free trade pact and this has helped to cushion the impact on Malaysian automakers.

Nissan plans to introduce an electric car in Malaysia this year, although the launch date may be delayed depending on Japan's recovery, he said.

Honda senior general manager Azhar Abdul Wahab said stockpiles of parts are sufficient for the next three months, after which production may be hurt if the situation in Japan doesn't stabilize.

UMW Toyota Motor's President Ismet Suki said overtime work has been halted but there was no cause for alarm yet.

"We are still assessing the situation but I'm quite confident that the catch-up plans will be quite ambitious," he said.

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