Haven't heard much about the earthquake that hit Japan in early March recently? Order's up!
What every car expert has been predicting half-way through the ensuing aftershocks, is coming to light. Many dealers, expecting strong sales through 2011, are beginning to see the end of their stocks. The Wall Street Journal is running a story at the US' largest auto dealer network called, rightly so, AutoNation.
This huge business runs 246 dealers in 15 states. As you can imagine, many of these franchises sell Hondas, Toyotas and many other Japanese brands and their stocks are not being replenished. Other groups are also feeling the same crunch.
Here's how it goes: On an average month, Power Toyota of Cerritos, California, delivers 58 new Corollas. So far, in May, they've received only one. Not good. Check the image for more examples.
Three other issues are coming of this unfortunate situation.
The upside, for the moment and for those products that require little or no Japanese parts, is that they are being pushed to the forefront. Brands like Hyundai and Ford have been on the receiving-end of much praise and attention in the last few years. These tough times for the Japanese will almost certainly translate into very good times for them.
This story is far from over and we'll continue to keep an eye on it.
Source: WSJ
What every car expert has been predicting half-way through the ensuing aftershocks, is coming to light. Many dealers, expecting strong sales through 2011, are beginning to see the end of their stocks. The Wall Street Journal is running a story at the US' largest auto dealer network called, rightly so, AutoNation.
This huge business runs 246 dealers in 15 states. As you can imagine, many of these franchises sell Hondas, Toyotas and many other Japanese brands and their stocks are not being replenished. Other groups are also feeling the same crunch.
Here's how it goes: On an average month, Power Toyota of Cerritos, California, delivers 58 new Corollas. So far, in May, they've received only one. Not good. Check the image for more examples.
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| Photo: Wall Street Journal |
Three other issues are coming of this unfortunate situation.
- Smaller dealers and groups are most likely not getting any new cars to replenish their stocks which are certainly low. Unless part of a conglomerate, survival will be difficult for stand-alone dealerships.
- How will dealers deal with the 58 people wanting that single Corolla? Although the situation is not yet that dire, unless Japanese makers cannot get back on track in the very near future, price gouging can and may become a serious problem. For the moment, Japanese cars prices have increased moderately, however as Toyota has announced that production in Japan and North America will be slowed for most of the year, we expect that increases will continue.
- For example, AutoNation has completely revamped their advertising campaigns to promote domestic and other non-Japanese brands, demonstrating and putting forth alternatives. This can and will most-likely hurt Toyota in the short and long run; Toyota had barely begun to climb out of the recall scandals from the last two years. More bad news.
The upside, for the moment and for those products that require little or no Japanese parts, is that they are being pushed to the forefront. Brands like Hyundai and Ford have been on the receiving-end of much praise and attention in the last few years. These tough times for the Japanese will almost certainly translate into very good times for them.
This story is far from over and we'll continue to keep an eye on it.
Source: WSJ