BMW Production Worries

BMW Production Worries

BMW Production Worries

After reporting on the halt of Toyota production earlier this week due to the disaster in Japan, it has emerged that BMW might have to follow suit. As a second worried manufacturer has emerged this may indicate the start of mass problems in manufacturing. Whilst the effects of the Earthquake and Tsunami are in the early stages we are starting to see how important this country is in automotive production.

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Now before you start thinking we are not focusing on the main issue of the earthquake (the people) we are not. It has been a tragic event for the country and we hope that everyone is OK and starts to recover as quickly as possible. This article is about the economy and in particular the effect on the automotive industry.

Japan produces many of the key parts for many of the world's top manufacturers. The microprocessor which is the integral part produced in Japan is extremely key to the production and would halt lines all over the world. The main area that will be affected will be the production of gearboxes.

Whilst the microprocessor actually controls most components in the car obviously the gearbox is a major part of the production process. Especially the processor is a major part in automatic gearboxes. It has emerged that prior to the earthquake hitting a shipment did leave Japan for the USA so production will be able to continue for the coming weeks until this shipment runs out.

What you can expect is to see manufacturers running skeleton shifts to keep production moving but at a much reduced rate. It is also thought that the launch of the brand new Nissan Leaf could be completely halted as it is built in Japan.

At present all manufacturers are trying to see if the production of the parts can be quickly switched to another plant in a different country. The problem they face is that this type of production is so specialized and the volume needed is large. To ask an already set up producer of chips to add this in to their existing production would be very hard to see.

Quite ironically as the recession hit and then continued the manufacturers made the shrewd business decision to work more on a just in time basis rather than hold massive stocks of new cars. This leaves them more at risk to production stoppages, and any period of production stoppage would run the risk of leaving them with no cars to sell.

We severely hope that the people of Japan can recover from this terrible event as quick as possible. We also hope that the global car manufacturers can salvage some type of production so that the effect of this quake is not felt for longer than is needed.

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