Disasters Driving Japan Auto Parts Makers to China

Money Morning submits:

By David Zeiler

Disruptions caused by Japan's March 11 earthquake and tsunami could further encourage Japanese auto parts makers to relocate factories to China - an eventuality already being driven by explosive growth in the Chinese auto market.

Japan's Big Three automakers - Toyota Motor Corporation (TM), Honda Motor Co. Ltd. (HMC) and Nissan Motor Co. Ltd. (NSANY.PK) - all already operate assembly plants in China. And while 60% to 70% of the parts those plants need come from within China, the rest must be imported from Japan. So if the assembly plants run out of the parts from Japan, production will halt.

Although no plant in China has yet reached that point - Toyota, Nissan and Honda have all said their factories have enough parts to sustain production for at least two more weeks - the possibility has led some to contemplate a more localized supply chain.

"Companies were


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