Koreans gained from earthquake, says Mazda boss

2011 has been a tough year for the Japanese auto industry. An earthquake and tsunami that hit northern Japan in March was followed later floods in Thailand, where many of the Japanese car companies have manufacturing plants that build products for markets such as Australia.

Add to those natural disasters the economic impact of a weakening US dollar, which has driven up the value of the Yen and made exported products from Japan less affordable in global markets and you have what the Queen once described as an annus horribilis for the Japanese industry. Some car companies have fared better than others.

During the Tokyo Motor Show last week, motoring.com.au met with Takashi Yamanouchi, CEO of Mazda and asked him for his thoughts on the tribulations the Japanese industry had faced during the year. Firstly, we asked, the dependence of the car companies on parts supplied to other parts suppliers two or three times removed from the mainstream vehicle production had brought the Japanese industry to an effective halt; what would Mazda do and indeed, what had the company done to ensure this wouldn't reoccur?

"There are no preventative measures for natural disasters," Yamanouchi-san said through an interpreter. His reply was greeted with laughter around the room, but the CEO understood the intent of the question and carried on with a more sober response.

"What we learned from the earthquake was that we didn't have a good understanding of the impact and the relationship [between] tier 2, 3 and 4 levels of suppliers.

"We as an automaker deal with tier 1 suppliers and I think tier 1 and tier 2 suppliers should be more on top of the situation with suppliers below them.

"As a result of the earthquake we have a greater database of those deeper suppliers, which allowed us to recover more quickly with the Thailand disaster.

"So we have learned a lot of lessons from that experience; it's a matter of how we can achieve business continuity and get good ideas into place to ensure that."

In the aftermath of the natural disasters and the tough sales environment this year, has the industry held up? What was the mood among the car companies at the motor show, Yamanouchi-san was asked.

"I am vice chairman of JAMA [Japanese Automobile Manufacturers Association], so the meaning of the motor show is that we've recovered Japan's ability to manufacture goods and we have a bright future — I think that's the tone set by the exhibitors at the show."

Finally, Yamanouchi had one particularly forthright remark to offer. It was at once an admission and a counter challenge.

"With help from the earthquake, the Koreans have made much more inroads, but we're trying to convey a message that we're not out of the game yet."

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