Automakers around the globe have been rattled in the aftermath of the Japan earthquake. The disruption of the tremble has been exacerbated by soaring gas costs. As a result panicked customers have been ripe for the plucking by unscrupulous dealers of fuel-efficient cars. Panic buyers seeking sought-after models such as the Nissan Leaf are getting taken by dealers taking’ advantage of the situation.

Business stops after quake

The automakers all over the world get parts from Japan’s automotive industry. It’s a very significant industry for this very reason. In the aftermath of the Japan earthquake, the global automotive industry is especially sensitive to disruptions in the supply chain due to the “just-in-time” manufacturing practice of tight inventory management that was pioneered in Japan. This worried several automakers after the Japan earthquake hit. They realized the nuclear devastation zone was where many parts were manufactured. There are 20 auto component suppliers that were in the 100 mile radius of probably the most earthquake damage which U.S. auto parts maker Delphi realized. According to Goldman Sachs, the global automotive supply chain relies heavily on the Japanese automotive industry for rubber and plastic goods, also as semiconductors and microcontroller technology.

Issues the U.S. automaker faces

Toyota warnings that it will not be able to give short-inventory parts to everyone were given out which impacts North The United States. Certain shades of red and black are not as readily accessible from both Ford and Chrysler. This is because a metallic pigment manufacturer in Japan has been shut down. The fuel efficient automobiles for instance the Toyota Prius hybrid, the Toyota Yaris, the Honda Fit and the Mazda2 subcompacts have been harder to produce because of Japan shutdowns. The demand and prices for cars are both going up during the Japan nuclear crisis for any cars that can’t be manufactured in Japan. A $5,000 premium is paid in northern California for the Nissan Leaf now which normally goes for $25,000. Normally, $40,000 is the price paid at California dealerships for a Chevy Volt. Now, it goes for $61,000.

Shortages to last for a short period

Automotive experts predict shortages of the Leaf and Volt to last up to six months, along with other fuel efficient vehicles. Waiting to purchase is something customers should do. They should wait unless they absolutely need to buy. When the summer driving season arrives in a few months, gas costs are anticipated to exceed $4 a gallon. Instead of buying a high mileage auto at or above the sticker price, it could be smarter to simply slow down — or walk or ride a bike rather than driving in certain situations. Consumers will feel sad that they spent so much money on an auto after the global automotive industry gets back to normal.

Articles cited

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