Thailand flooding impacts automobile supply chain

By Freddie Pierce
A recovering auto supply chain may have been dealt another major blow in the recent weeks, as flooding in Thailand has reached epic levels. The country...

A recovering auto supply chain may have been dealt another major blow in the recent weeks, as flooding in Thailand has reached epic levels.

The country, which serves as a major automobile production hub for Asian carmakers, is witnessing its worst flooding in 50 years, and logistic problems caused by the flooding could affect automobile production.

The automobile supply chain in the region has become a mess, and hundreds of cars that are scheduled for delivery are submerged in water stemming from the Thailand floods.

VIDEO FOOTAGE OF THAILAND FLOODING

About 270 people have died since the Thailand flooding began in late July, and almost 200 factories have flooded. Arguably the most important of those is Honda’s Ayutthaya production plants, which are capable of producing 240,000 vehicles each year.

With floodwaters approaching the area, Honda halted production and evacuated workers from the Ayutthaya plants on Thursday.

“(Flooding) will affect all original equipment manufacturers (OEMs) as suppliers in Ayutthaya and in Pathum Thani (Navanakorn) supply all major suppliers,” Hajime Yamamoto, Thailand director for Colorado-based research firm IHS Automotive, told Reuters.

“Honda will be hit hardest due to its location but others will nonetheless feel the disruption.”

SEE OTHER TOP AUTOMOBILE SUPPLY CHAIN STORIES IN THE SUPPLY CHAIN DIGITAL CONTENT NETWORK

Japan’s supply chain sees some improvement

Japan supply chain affecting India car market

October’s issue of Supply Chain Digital has gone live!

One industry source said that there were 20 car plants in the Rojana and Saharat Nakorn industrial regions that were disrupted by the floods, which makes up about 10 percent of total automobile parts production for Thailand.

The Rojana Industrial Park, located in the Ayutthaya province, about 45 miles from downtown Bangkok, also has big-time companies like Canon and Nikon, which could see their own supply chain problems caused by the flooding.

The only good news stemming from the developments in Thailand at this point is that eastern province Rayong, the center for most automobile assembly operations, has been relatively unscathed to this point.

Click here to download Supply Chain Digital’s iPad app!

Share

Featured Articles

Heineken Toasts Success of Supply Chain Transformation

Digital transformations have a notoriously high failure rate but not so at Heineken, who has transformed its European logistics operations to great effect

GEP's Procuretech Advice, as new Scope 3 Reporting Laws Loom

GEP issues advice around mandatory Scope 3 reporting, an issue that will figure large at Sustainability LIVE: Net Zero, being held in London

Cainiao: The World's Largest Ecommerce Logistics Provider

As Alibaba-owned Cainiao announces big Q3 FY2024 revenues rise, we profile the world's largest global e-commerce logistics services provider

FedEx Express Opens Singapore Logistics HQ

Logistics

Supply Chain Problems Sees Partnerships Programme Grow

Operations

Bain: CEOs Leveraging Supply Chain for Competitive Edge

Digital Supply Chain