Pioneer, Nikon Lead Declines in Tokyo After Floods Close Thailand Plants

Pioneer Corp. (6773), a Japan-based maker of car-navigation systems, fell the most in a month, leading declines among manufacturers including Nikon Corp. (7731) after plants in Thailand were shut because of flooding.

Pioneer dropped 4.3 percent to 314 yen at the 3 p.m. close of Tokyo trading, the biggest decline since Sept. 12, after earlier tumbling as much as 9.5 percent. Camera-maker Nikon fell 3.5 percent, compared with a 0.4 percent decline on the benchmark Nikkei 225 Stock Average.

The worst floods in more than 50 years crippled operations of Japanese companies in Thailand, an overseas production hub. The deluge forced Toyota Motor Corp. (7203) to temporarily close three factories in its biggest Asian manufacturing base outside Japan, while Nikon halted its largest facility for making cameras with interchangeable lenses.

“These production halts may lead to supply chain problems,” said Mitsuo Shimizu, an analyst at Cosmo Securities Co. in Tokyo. “The damage for manufacturers of autos, electronics and parts seems to be very severe.”

The Thai plants are among Pioneer’s main facilities for car electronics, spokesman Hiromitsu Kimura said by phone today.

Nikon hasn’t been able to determine when it can resume operations at the flooded plant in Ayutthaya, the company’s biggest manufacturing base for single-lens reflex cameras, Yasuyuki Takeda, a Tokyo-based spokesman, said by phone today.

SLR Cameras

Nikon’s inventory of SLR cameras will probably last for about a month and the effect on earnings would be negligible should the company resume the plant’s operation within a month, Hisashi Moriyama, a JPMorgan analyst in Tokyo, said in a report dated yesterday.

Suspensions lasting two months could cut Nikon’s revenue by 30 billion yen and operating profit by 5 billion yen to 10 billion yen, he said.

Sony Corp. (6758) halted operations at its plant for digital cameras in Ayutthaya, spokesman Hirofumi Otsuru said today. The company suspended output at the plant yesterday and plans to wait at least until Oct. 14 before restarting, he said.

ON Semiconductor Corp. (ONNN), a U.S.-based maker of chips that help computers manage power, expects “some loss of revenue” in the fourth quarter and into 2012 after suspending production at its Sanyo Semiconductor unit in Thailand, it said in a statement yesterday. The subsidiary accounts for as much as 10 percent of ON Semiconductor’s total production, the company said.

Toshiba Corp. has suspended production at eight of its factories, two of which make chips and hard disks, as of today, spokeswoman Kaori Hiraki said.

Toyota Closures

Toyota, which made 630,000 vehicles in Thailand last year, is still assessing the cost of the floods, Amiko Tomita, a spokeswoman for the carmaker, said today. The Toyota city, Japan-based company plans to close its Thai factories through Oct. 15 and is considering shipping parts to Thailand from other countries to alleviate a shortage caused by the floods, she said.

“As we saw after the earthquake and tsunami in March, even if one part is missing, car production can become entirely suspended,” said Issei Takahashi, an analyst in Tokyo at Credit Suisse Group AG. “The flood may cost about 20 to 25 billion yen for the entire auto industry.”

Thailand’s auto production forecast will probably have to be cut from 1.8 million units given the lost output from the disaster, Surapong Paisitpatnapong, spokesman for the Thai Automotive Industry Club, said today by phone from Bangkok.

Honda Production

Honda Motor Co., Japan’s third-biggest automaker, may lose production of an estimated 4,500 vehicles because of plant closures, while Pioneer plans to suspend operations at its two plants for two weeks, the companies said in the past two days.

Thailand is Honda’s biggest production base in Southeast Asia, and the second biggest in Asia outside of Japan. In 2010, it produced about 170,000 units in the country. The carmaker makes models including the Accord and Civic in Thailand, and exports to Indonesia, the Philippines, and Malaysia from there.

“For Honda, it’s not only an issue of parts supply, so it may take them about three months to rebuild their facilities and recover production,” said Jessada Thongpak, an analyst overseeing the South Asian market at IHS Automotive.

Nissan Motor Co., Japan’s second-biggest carmaker with capacity to make 220,000 units a year in Thailand, has not received any damage at its plants, Chris Keeffe, spokesman for the company, said today.

“Operations will continue as normal until Thursday, after that we will assess whether to continue operations on Friday,” Keeffe said.

Mitsubishi Motors Corp. plans to suspend production in Thailand from Oct. 13 to Oct. 15, spokesman Shigeru Jibiki said by phone today.

While the automaker’s facilities have not been damaged, deliveries of parts from some suppliers have been delayed, he said. The company expects production to be cut by 1,500 units.

Hitachi Ltd.’s plant that makes compressors for refrigerators was halted from Oct. 7, spokesman Yuichi Izumisawa said. Hitachi Metals Ltd., a unit of the Tokyo-based electronics maker, also halted two plants making components used in hard disks and autos, he said.

To contact the reporters on this story: Mariko Yasu in 東京 at myasu@bloomberg.net; Anna Mukai in Tokyo at amukai1@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net

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