Thai floods savage Honda

... blamed in large part for the demise of one of Sydney's leading dealerships, with scarcely a car of any type that could be said to lead its class and battered by Japan's tsunami and earthquake.

Couldn't possibly get any worse.

Except it has.

Here we see the Honda factory awash in floodwaters in Ayutthaya, central Thailand. This is where we get our Civic sedans, CR-Vs, Citys and Accords. Honda's quarterly profit has fallen 56 per cent, battered by the strong yen and production disruptions from the tsunami that will be compounded by Thailand's biblical weather.

The floods have further damaged car makers  Honda, Toyota and Mazda-Ford among them  who have built additional car plants in the country, lured by low labour costs and government incentives.

Mazda Australia spokesman Steve Maciver says the plant where the new BT-50 ute - and its cousin, the new Ford Ranger - is built, is "some distance away from the floods and has not suffered any damage".

"However, production has currently been suspended until November 4 due to the impact of the floods on parts supply," he says. "We've currently got stocks on the ground here in Australia and although we'll continue to monitor the situation closely, our launch plans for new BT-50 are not affected.

"Dual cabs are available now from Mazda dealers with Freestyle cabs arriving late this month or early December. Single cabs will follow early in the new year."

Toyota says its three-plant operations in Thailand  where it makes the Hilux  has stopped "mainly due to lack of parts produced by suppliers".

A spokeperson in Japan says "our factory itself is not physically affected at this moment".

"We are still watching the situation and not able to disclose when we would resume production there. A decision on production from November 7 onward will be made based on an assessment of the situation as it develops."

In Honda's case, the Thai floods washed away not only the short-term ability to build car parts in Ayutthaya provincem, it has hit components and sources additional parts from nearby suppliers.

Honda says its North American production will be half of its original plan from November 2 through to November 10 at its six plants in the US and Canada due to parts shortages resulting from the floods.

It has also delayed by several weeks the launch of its 2012 Honda CR-V SUV.

Honda's chief financial officer, Fumihiko Ike, interviewed by Reuters yesterday said: "To put it bluntly, we're in a really tough spot".

"We're in a much more difficult position because our car factory is inundated."

Mr Ike says operators of Ayutthaya's industrial estate, where the Honda plant is located, told him it expects removal of the floodwaters to take until mid-December.

Restoring work at the damaged facility may take a few months from there, meaning work could be halted through the end of the business year, he said.

Mr Ike estimates that about one-tenth - or 35 - of Honda's tier-one suppliers for cars in Thailand had been flooded and that as the damage spreads, more suppliers down the chain could also become affected.

The floods have also severely dampened profit outlooks.

Honda overnight withdrew its profit forecast. It had previously forecast sales of 3.512 million vehicles in the business year to March 2012. More than 5 per cent of its vehicles are built at the now-flooded Thai plant.

For the July-September second quarter, Honda reported a 68 per cent drop in operating profit to $680 million on a 14 per cent plunge in its global car sales.

Most of the decline is attributable to the effects of the March tsunami that closed down one of the biggest factories of microchip manufacturer Renesas Electronics.

All Japanese carmakers have had a second - or in many cases, a third - blow. Their currency-related losses with the US dollar are well below their assumptions of an 80 yen average this business year.

The exchange rate is now about 78 yen.