The devastating effects of the earthquake in Japan are very real. We are just hoping we can check with you on whether or not what we are hearing from car salesmen about other effects are real. We went shopping yesterday to look at the Honda Pilot and the Subaru Tribeca. Every dealer we talked to said that because of the earthquake in Japan, prices of these cars are going up because their dealers can’t get enough inventory and so it is driving the prices up. They also said that even the used cars are going to be more expensive because they are harder to come by. Is this true? Should we put off buying either of those cars because they are priced high now and will then lose their value later?
Short term it’s real, many Japanese plants have gone to reduced (or zero) production because of the lack of critical parts. It’s impossible to predict how long this will last, and how big an effect on price it will have.
It also affects American and European manufacturers too, because they all have parts that are built in Japan. Some vehicles are more affected by this, while others are less affected.
I bought my Mazda RX-8 shortly after the earth quake happened.
It was on the last shipment of cars that was sent back in February, and had arrived in the US just before the quake happened.
As for dealers raising their prices for the inventory that they have on hand, you don’t want to buy from that dealer at all. They obviously received their current inventory before the quake happened, and they are just trying to make more profit off of a situation that is out of everyone’s control.
They will sell a car if they have it in stock, and if they don’t have it in stock, they will trade with other dealers across the US and Canada until they have one you are willing to buy.
You are better off using your internet skills to find the car you want, and contact the dealer that has it in stock directly, however, in most instances.
Unfortunately low supplies will drive prices up, unless there’s a big drop in the economy. So it’ll be harder to negotiate a price now.
Make no mistake, if Japanese car prices go up, all other makes will have upward pressure too. At the vary least, incentives will be harder to come by on competing models.
If any dealer tells me the prices are going up because of inventory, I’d re evaluate my need for a new car. Treat your present cars to a detailing. I did that once preparing a car for a sale and was so impressed by the results, I put off selling the car a year. You may feel that way too.
It’s a safe bet that the MSRPs will not go up because of the earthquake and then drop later. Any rise in price will be based on longer term business strategies. albiet possibly helping absorb financial recovery from earthquake losses. The effects of the quake are far longer lasting than the dealers have been suggesting, perhaps because they have monthly quotas to meet.
Other manufacturers might want to chip away at Toyota’s and Honda’s market share by keeping the price stable, as Mountainbike suggested. It could be an opportunity for Ford and GM to get a little business among price conscious buyers.
What part of the tsunami and nuclear meltdown did you miss? I mean one of the most catastrophic events of the century and in a whiney voice you care about your ability to buy a new car and it’s resale value? I know people sometimes have no clue, but you could be a poster child.
On the financial side, I read that the Korean car makers stock is already going up with the anticipation of demand picking up. Inflation was already knocking on the door, gas prices were increasing demand for smaller cars which are a bigger portion of the Japanese sales.
I walked in our local Honda dealer the other day to test drive an Accord and the parking lot had only one third of it taken with new cars and the rest was empty. Before this disaster the lot was full.
All this shows how global we have become.
If you are willing to pay msrp, then the price has gone up. It’s a number’s game.
I think your outrage is misdirected. texases didn’t ask the question.
This is real. Although Honda and Toyota have factories in the US, a lot of parts come from Japan.
Why not shop for a non-Japanese brand? The Koreans (Kia and Hyundai) have come a long way in quality. The same goes for Ford.
Personally, if I was shopping for a car right now, I would be taking a close look at Ford’s vehicles, in spite of their cheesy television commercials.
I figured he was responding to the OP. And Waterboy, while you’re absolutely right, there will be hundreds of thousands of people buying cars in the next year that will have to pay hundreds (or more) dollars than they thought they were for a car. That’s a big personal impact to them, and they’re right to be concerned about it. Help with the disaster, sure, but don’t imagine that stops folks’ normal concerns and worries.
You can read about the impact to the electronics industry here- http://download.siliconexpert.com/mkt/lps/japanearthquake_report/japan_earthquake_report_2011.html
Look at the extensive list of companies/products that have been affected. These are only the primes, not downstream companies relying on their products. Some of these factories have no projected date for resuming activities. One could assume they are completely wiped out. This will impact everyone at some point…
Inventories of crucial car supplies; anything from computer chips to paint pigments ? are dwindling fast as factories in Japan that make them try to get restarted. Car manufacturers (U.S & Japan) are already limiting colors available on new models. Black will be one of the hardest hit colors, and will probably be unavailable to order soon if it isn’t already!
Japanese firms pioneered ‘just in time’ inventory control. That’s going to hurt them now.
Right, the guys with a back log of Pinto engines look good now. “Just in time” sub contracting is a key ingredient for quality control and all car companies practice it now if they want to compete and everyone is affected.
J.I.T. has saved/made them countless billions over the last 25-30 years. I think it was worth it.
" “Just in time” sub contracting is a key ingredient for quality control…"
It seems to me that excellent quality control is a key ingredient of JIT manufacturing, not the other way around. Without good QA, substandard parts would be received just i time to be rejected and shut down the assembly line. JIT is a key ingredient in inventory control and, as Whitey pointed out, saves a lot of money. As long as only high quality parts are delivered.
Absolutely JIT is the way to go, but this unbelievable combination of circumstances resulted in it causing a problem. JIT’s low inventories are one part of quality control, has to be tied to constant sampling and monitoring of part quality. The explanation I saw contrasted it with a picture of an old Ford factory, with engine blocks piled against a wall. If a problem was found there were weeks of block that had to be scrapped.