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Local import auto dealers see shortage after disaster in Japan
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Gary Thompson/Las Vegas Review-Journal
Import auto dealers are running low on certain car models because of plant closures, but Findlay Toyota still has a few Scions left. » Buy this photo
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LAS VEGAS REVIEW-JOURNAL
Import car dealers in Las Vegas are starting to feel the pinch from the devastating earthquake and tsunami that struck Japan in early March, which temporarily closed down automobile manufacturing and parts plants.
Rising gasoline prices were already contributing to a shortage of the Toyota Prius, and now there's only seven new models left on the lot at Findlay Toyota, general manager Rich Abajian said Tuesday.
He was bidding on a used 2010 Prius with 10,000 miles that had a book value of $26,200 and went for $29,700 to someone who's going to resell it. The "Package Five," or upgraded Prius, would normally have a window sticker price of $31,000.
First the Prius will be in short supply, then the Yaris and Corolla, and eventually it will wind down to the four-cylinder Camry, Abajian said.
"It'll go in order of gas mileage. That's how the inventory will be depleted," he said. "We've got all models of cars, but they are going to shrink rapidly in the next four weeks. Our inventory is going to be so minimal because of the situation in Japan."
Findlay Toyota is still getting cars from the manufacturer's pipeline, but whereas a normal delivery might bring 150 new cars onto the lot, now it's maybe 17, the general manager said. Inventory has been reduced from an 80-day supply at the time of the disaster to about 45 days, he said.
Kevin Bushey, sales manager for Honda West, said the majority of the 93 new Honda models allocated for May probably will not make it to the dealership on West Sahara Avenue.
The lot is full of CR-Vs, Elements and Pilots. Good luck finding a 2011 Accord or Civic, especially the hybrid versions. They're gone, Bushey said.
"There'll be that lag time for those bigger sellers," he said. "As far as supply and demand, they're asking MSRP (retail price) in California. No discounts. I expect the same thing here."
Toyota, Nissan and Honda all have North American operations, but they rely on Japanese production for about one-fourth of U.S. new-car sales. Some cars made in Japan were already in short supply, including the Nissan Juke and Rogue and Toyota Prius, all currently at about 30-day sales levels.
Others such as the Toyota Yaris, Honda Fit and Mazda3 were plentiful before the earthquake, but are now dwindling.
"Obviously, quite a few Toyotas and Hondas are built in America, so it wouldn't be an entire model line," said Tyler Corder, chief financial officer of Findlay Automotive Group. "One unknown is the supply chain. Let's say a brake manufacturer was shut down. That could have a production delay across the entire network."
Shipping is another concern. It takes about 30 days for a car to roll off the assembly line in Japan, go to port and be shipped to dealership lots in the United States, Corder said. Along with plant shutdowns, major ports in northern Japan were incapacitated by the tsunami.
Detroit-based IHS Automotive estimated that production of some 450,000 Japanese vehicles will be lost in March. The country makes about 37,000 cars and trucks a day.
"A lot of automakers are playing down the severity of what we're looking at in the next quarter," IHS senior analyst Aaron Bragman told the Review-Journal on Tuesday. "Quite frankly, it's going to get worse before it gets better."
Demand for all fuel-efficient vehicles has soared, he said. Japanese automakers will be the first to be affected, but the loss of production will spread to U.S. companies.
"It's a big chain we call downstream production. All it takes is one part," Bragman said.
Ford Motor Co. stopped production at its truck plant in Kentucky because it faced a shortage of mass air flow sensors, he said. They're made by Hitachi in Japan.
Nobody wants to spook car buyers or the market, but any automobile dealer who says the import market doesn't affect them is not exactly being truthful, Bragman said.
The reality is nobody really knows how much of an impact Japan's disaster will have on auto sales in the United States, said Laurie Harbour, president of the Society of Automotive Analysts in Detroit.
"There's still a lot of parts that come over from Japan," she said. "Most of the parts production is in the southern part of Japan, not the northeast. The biggest issue is Japan automakers have shut down plants and so there are certain models only built in Japan that won't be shipped here in a while."
Nissan expects to resume full production within a couple of weeks. The company resumed partial production in late March using existing stock of parts.
Toyota is projecting a 50 percent reduction in allocation for the next month and a half, Findlay's Abajian said. It may take a couple more months to get back to full allocation.
"Everything is fluid right now, depending on any damage to suppliers," he said. "Toyota needs to be careful with the trouble they had with the U.S. government and make sure they're producing quality parts."
Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.
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Local import auto dealers see shortage after disaster in Japan
TRANSLATION
WE ARE GOING TO RAISE OUR PRICES,ABOUVE THE 2-3 K THAT WE HAVE OVER EVERY OTHER CITY
NEVER BUY A CAR IN RIPP OFF VEGAS ITS OVER PRICED
CHECK OUT CARGURUS.COM
This points out how vunlerable Jspsn's "Just-In-Time" (zero inventory) production system that Toyota ironically created 20 yeears or so ago is to disruptions from natural or man-made catastrophes and causes where the margin of error is practically zero to make it work. It is obviously a temporary gliche in the supply chain and recovery should be returning to normal sooner rather than later.
They will geo over it
buy american ford is good