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Japan Tremble Shakes Up Global Auto Industry
The entire supply chain of the global auto industry has been thrown into disarray by the March 11 earthquake in Japan. Fuel-efficient vehicles built in Japan, as well as others dependent upon parts manufactured there are becoming increasing hard to find. Panic shoppers seeking sought-after models such as the Nissan Leaf are getting taken by dealers taking' advantage of the situation.
Japan earthquake stops automotive business
The Japanese automotive industry is one that creates parts for automakers throughout the world. In the aftermath of the Japan earthquake, the global automotive industry is especially sensitive to disruptions in the supply chain because of the "just-in-time" manufacturing practice of tight inventory management that was pioneered in Japan. After automakers realized major essential parts were produced in the nuclear disaster zone in the Japan earthquake, automakers didn't know how to proceed. There are 20 auto component suppliers which were in the 100 mile radius of probably the most earthquake damage which U.S. automobile parts maker Delphi realized. The Japanese automotive industry is needed for the global automotive supply to be able to get semiconductors and microcontroller technology as well as rubber and plastic goods, reports Goldman Sachs.
Automakers worried about aftermath of tremble
The North American impact of the Japan earthquake and tsunami consists of a warning from Toyota that it won't fill any orders of short-inventory parts. There was a Japan plant that manufacturers metallic pigment which caused Ford and Chrysler to ask dealers to stop selling black and red cars. Shutdowns in Japan have caused supply disruptions in many fuel efficient vehicles. This includes the Mazda2 subcompact, Honda Fit, Toyota Yaris and Toyota Prius hybrid. Japan manufactured vehicles are becoming more demanded after the Japan nuclear crisis. This means the price continues to go up. Normally, $25,000 is paid for the Nissan Leaf. Now, in northern California, it has a $5,000 premium. A Chevy Volt was offered at a California dealership for $61,000 also although normally it costs $40,000.
Do not be hasty
Automotive experts predict shortages of the Leaf and Volt to last up to six months, along with other fuel efficient vehicles. Most customers should wait to purchase. Gas prices will go over $4 a gallon soon as the summer driving season begins. Do not spend too much money on a high mileage car above the sticker price. You may instead want to walk, ride a bike or just slow down. The global automotive industry will get back to its normal pace. At this time, several will feel cheated that they spent so much on a car.
Citations
Financial Times
ft.com/cms/s/0/9ac4d7e2-595f-11e0-bc39-00144feab49a.html#axzz1I0fJQD7p
Wall Street Journal
blogs.wsj.com/drivers-seat/2011/03/27/panic-car-buying-likely-to-spread-as-shortages-worsen/
Automotive News
autonews.com/apps/pbcs.dll/article?AID=/20110329/OEM01/110329866/1292
bNET
bnet.com/blog/electric-cars/price-gouging-is-rampant-on-the-chevy-volt-and-nissan-leaf/3709
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