Fitch: Impact on Japanese automakers and steel companies from earthquake

The leading global ratings agency Fitch Ratings has said that the March 11 earthquake in Japan will likely have a negative short-term impact on the production and shipment activities of Japanese automakers and steelmakers, but added that it is too early to gauge the disaster's long-term ratings impact on the sectors.
 
"Although only a few automakers such as Toyota Motor and Nissan Motor had a manufacturing presence in the areas directly affected by the earthquake and the subsequent tsunamis, almost all automakers and some steelmakers suspended operations after the quake to assess the potential impact on their operations. While immediate damages to the plants and equipment might be limited, production and shipments could be affected by potential disruption in the supply chain, logistics and electricity supply," Fitch said.
 
The agency noted that at this stage it is difficult to quantify the impact on individual companies, adding the extent to which each company's business and financial profile will be affected varies according to its specific circumstances.
 
The direction of the Japanese yen over the next three to six months as a result of this catastrophe will also affect the profitability of the Japanese automakers, Fitch said. After the 2008 financial crisis, a strong yen against other major currencies has adversely affected the automakers' revenue and profitability.