Honda Generators Run Out as Quake Cripples Output

Portable power generators made by Honda Motor Co., Fuji Heavy Industries Ltd. (7270) and Yamaha Motor Co. are running out after Japan’s largest earthquake crippled production while simultaneously stoking demand.

Orders for the generators, used to provide hot baths and meals to survivors of the magnitude-9 temblor and ensuing tsunami, surged after the disaster knocked out power plants, causing electricity shortages.

“We’re completely out,” said Ryuzo Nishikawa, who runs his own company in Tokyo selling generators made by Fuji Heavy and Yamaha. “We ran out three days after the quake, but we’ve been receiving orders from hospitals and factories every day.”

Companies including Toyota Motor Corp. and Sony Corp. halted output after last month’s disaster devastated northeastern Japan, damaging factories that make parts and materials and disabling a nuclear-power plant. The government estimates damage from Japan’s strongest earthquake to be as much as 25 trillion yen ($299 billion), or 0.5 percent of Japan’s economy, the world’s third-largest.

Higher Prices

The natural disasters left more than 27,500 people dead or missing as of April 3, according to the National Police Agency in Tokyo. Emergency shelters housed 161,643 people, police said.

The disasters also sparked nationwide shortages of power generators, flashlights, batteries and bottled water, as rolling blackouts and government reports of elevated radiation in tap water drove up demand.

A Honda EU9i generator was bid at 178,000 yen, the highest of 128 offers, on Yahoo Japan Corp.’s online auction site on April 1, compared with a regular price of 129,150 yen.

“Some suppliers of parts needed to make generators were directly hit by the earthquake, and due to a shortage of these parts, we haven’t been able to make them,” said Yuki Watanabe, a spokeswoman at Honda. “We’ve received five to six times the usual orders from dealers, and we’re almost out.”

Nishikawa said he called Yamaha and Fuji Heavy asking for more and was told the companies were prioritizing orders from the government, the Self-Defense Force and from people in the region directly hit by the natural disasters.

Makeshift Baths

The Self-Defense Force gathered generators from its bases across Japan and bought additional units after the disaster, said Manabu Ikezaki, a spokesman for the military, which is assisting evacuees living in emergency shelters such as schools in the quake-stricken region.

“We use the power generators to heat makeshift baths and to cook warm food outside,” Ikezaki said. “We use them for just about everything.”

The earthquake and tsunami destroyed 21 million kilowatts of electrical generating capacity, or about the amount that would be generated by 10 Hoover Dams.

Tokyo Electric Power Co., the operator of the damaged Fukushima Dai-Ichi nuclear power plant, expects a shortage of 8.5 million kilowatts this summer as seasonal demand may peak at about 55 million kilowatts, compared with its capacity of 37.5 million kilowatts on March 31.

The utility began rolling blackouts to avoid bigger outages after the earthquake. The Dai-Ichi plant generated almost a 10th of the energy of the Kanto region, which includes Tokyo and contains about a third of Japan’s 127 million people.

‘Completely Out’

Shunsuke Yamaki, a spokesman at Yamaha, and Fusao Watanabe, a spokesman at Fuji Heavy, both said output of portable generators at their companies is unlikely to resume anytime soon, due to parts shortages.

“Orders have surged seven to eight times, but we’re completely out,” Yamaki said.

Honda sold 37,000 portable power generators in Japan last year, accounting for 45 percent of the market by unit sales. Yamaha had “a little over 30 percent” market share, including sales to other companies, in 2010, according to Yamaki. Fuji Heavy declined to give a sales figure.

Tokyo-based Honda, Japan’s third-largest carmaker, also halted domestic automobile production after the earthquake due to a shortage of components. Honda has estimated it lost output of 46,600 autos and 5,000 motorcycles between March 14 and April 3.

Honda has declined 11 percent in Tokyo trading since the day before the earthquake. The shares fell 1.3 percent to 3,010 yen as of today’s close at 3 p.m.

Resuming Output

Honda’s portable power generators are priced from 100,000 yen to 550,000 yen, Yuki Watanabe said. The devices, commonly used by construction workers and street vendors, use gasoline and have running times ranging from two hours to 12 hours.

Yamaha, whose generators cost from 130,000 yen to 530,000 yen, donated 500 units to the government for relief efforts, Yamaki said.

Honda has secured enough parts to partially resume production of large generators at a factory in Kumamoto, southwest Japan, though the company doesn’t know how long it may take to start making portable units, Watanabe said.

Yuichi Kato, who runs a business selling Honda generators in Tokyo, said customers quickly bought all of his 36 units after the earthquake.

“We ran out two days after the quake hit,” Kato said. “It doesn’t look like any of the makers will be getting their supply back anytime soon.”

To contact the reporter on this story: Anna Mukai in Tokyo at amukai1@bloomberg.net

To contact the editor responsible for this story: Kae Inoue at kinoue@bloomberg.net

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