AS Japan counts the cost of the earthquake and tsunami, the UK motor industry is preparing for the worst.

Crisis meetings are being held in car manufacturer boardrooms across the country as the ramifications of what the disaster could mean here becomes clearer.

Production lines of most Japanese manufacturers were seriously affected by the earthquake, but although they’re largely back online, the problems look likely to deepen.

Huge numbers of parts manufacturers and suppliers were lost in the disaster and it’s this supply chain that’s vital to car production which could lead to problems across the world.

Mazda has already stopped taking new car orders in America. It’s the first manufacturer to take action, but it’s unlikely to be the last. A spokesman for Mazda UK said the firm had sufficient stock for the next three months, but added it was monitoring the situation in Japan daily.

‘I don’t think the UK car industry has woken up to just how much of a problem this could become,’ one manufacturer insider told us.

Most makers have remained tight-lipped about what affect the disaster could have on their business. They, quite rightly, have been concentrating on the human tragedy that has unfolded and assisting where they can. But there’s no doubt many boardrooms are worried.

Car Dealer has learnt production of Land Rovers has been affected already because it can’t source sat nav units, there are rumors no diesel models have been made in France for five days at PSA or Renault and BMW has apparently set up a special unit to tackle the issue.

‘Some parts are vital to car production,’ said one source. ‘From what we can gather a factory that makes chips to make cars Euro 5 compliant was completely wiped out. It was the only one that made these chips. That will affect car plants across the world, not just those in Japan.

‘New suppliers can be found, but that takes time.’

NO NEWS

The biggest problem is the fact no one knows exactly what the situation is. BMW boss Tim Abbott recently told us he was unsure whether the disaster would affect production but said: ‘There will be ramifications for us all.’

He added that BMW’s procurement team were working flat out to ensure production wasn’t affected.

One of the problems is the fact many manufacturers scaled back the number of new cars they held in stock during the recession, moving instead towards building on demand.

Now there are waiting lists for most cars – some Nissan, Hyundai, Skoda and BMW models all have order times that can be well over four months. Order a BMW X3 now and you won’t get it until December or even January next year. This means any halt in production can cause serious problems.

Martin Ward from CAP has been looking into the problem and told us the disaster could lead to a number of issues in the UK.

‘Firstly many manufacturers have made right-hand drive cars for Japan and will now not ship them – that could lead to an influx of models with weird specs in the UK market,’ he told us.

‘Then there’s used cars to think about. Part supply doesn’t just affect new cars, what if you car needs a part and it can’t be supplied because it was made in Japan – cars could be off the road for months.

‘Of course new suppliers could be found, but testing for these parts takes months. We all hear about manufacturers testing their cars in South Africa and the North Pole for the tiniest of parts. Will they be prepared to put untested parts on their cars?’

Ward added many manufacturers don’t actually know what parts go into, say, a wiper assembly, because they buy the unit ready made. This is why manufacturers are so unsure as to whether they’ll be affected or not.

There is even a rumour circulating in the industry that bitter rivals Renault and Peugeot/Citroen are working TOGETHER to source parts, such is the scale of seriousness.

‘What this means to the market is unclear,’ added Ward. ‘It could go two ways. Some makers may stop taking orders so prices are pushed up in the used market for some models. Or it could go the other, if boat loads of cars destined for Japan are shipped here instead, flooding the market, prices could tumble. We are monitoring the situation very closely indeed.’

British Car Auction’s Tony Gannon added: ‘If there was a delay in car production and private motorists couldn’t order new, then many of these buyers might turn to the used market instead. This would increase demand and in turn that could then push up prices, especially when there’s such a shortage of quality used car stock at the moment.’

If you’d like to make a donation to the disaster relief fund you can do so here on the Red Cross website.