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japan-auto-industryTOKYO: Japan's auto production and exports suffered record drops of more than 60 percent each in April following the March 11 earthquake and tsunami disaster, an industry group said Tuesday.

Total domestic production of cars, trucks and buses plunged 60.1 percent year-on-year in April, as the massive calamity led to plant closures and cut supply chains, said the Japan Automobile Manufacturers Association.

Japan's exports of vehicles dropped 67.8 percent from a year earlier, the industry group said. Both the output and export drops were the biggest on record, a spokeswoman for the association told AFP.

Vehicle production in the country fell to 292,001 units in April from 731,829 in the same month a year earlier, while exports came to 126,061 units, down from 391,540 in April 2010, the industry group said.

Many component manufacturers that are key to auto production are based in the worst-hit regions of Japan, their facilities damaged by the 9.0-magnitude seabed quake or swamped by the giant wave that followed.

The quake and tsunami also crippled power generation facilities, including a nuclear power plant at the centre of an ongoing atomic emergency.

While most auto plants resumed production by mid-April, operations remain below capacity and analysts warn that parts shortages could go on for months, with the threat of summer power shortfalls also casting a shadow.

The damage to the sector has extended beyond Japan's borders, mainly due to supply chain disruptions -- Toyota and Honda reported last Friday that they saw global production halved in April.

Honda reported a 52.9 percent on-year drop in worldwide production and an 81.0 percent slump in domestic output, while Toyota, the world's biggest auto maker, said global production was down 48.1 percent.

Toyota announced a year-on-year drop of 15.4 percent in its global sales figures for April.

Honda, which was forced to temporarily suspend all production at its Japanese sites, said Friday that domestic sales were down 46.3 percent on year while exports dropped 76.2 percent.

The picture looked less gloomy for Nissan, which said global production in April had decreased 22.4 percent on-year but announced a 4.4 percent rise in worldwide sales, marking an all-time record for the month of April.

The wider downturn in the Japanese auto sector sent ripples through the world's number three economy, where thousands of small and medium sized businesses feed the major export industry with parts.

Japan has 800 major auto parts manufacturers supplying interior equipment and parts such as air conditioners, plus some 4,000 subcontractors and 20,000 sub-subcontractors, according to local media.

The government-owned Development Bank of Japan is planning to set up a 50 billion yen ($617 million dollar) fund in June to support auto parts makers hit by the quake disaster, an official said Monday.

Under the plan, the bank will offer the investment to the Japan Auto Parts Industries Association, which will then provide cash for its member firms as well as their subcontractors.

Copyright AFP (Agence France-Presse), 2011

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