Earthquake Aftermath May Affect Japanese Auto Market

The recent earthquake in Japan and the devastation it has caused, combined with the recent spike in U.S. consumer demand for highly fuel efficient vehicles may lead to a “run” on the limited supply of such vehicles from Japanese auto makers.

The rise in fuel prices and speculation that summer gas prices would exceed $4.00 for the national average had begun to create increased consumer demand for vehicles like the Toyota Prius and the Honda Fit. Because both vehicles are produced in Japan, the devastation of the March 11^th earthquake and tsunami has led to a massive reduction in production.

Dealers across the U.S. have watched their supplies dwindle. While the orders for vehicles for the months of March and April were already being delayed, some manufacturers in Japan have told dealers not to take any orders for May.

The result of the production slowdown and reduced availability has been a sharp increase in the price of the cars, including used vehicles. According to data from TrueCar.com, the average price for a Prius was up by half a percent in the first part of March, along with the Fit which was up about a tenth of a percent.

Source: USA Today