Also Follow North End Subaru On...

Thursday, March 17, 2011

Natural Disasters Sure To Affect Prices Of Imports...

U.S. shoppers could see prices for some of the more popular Japanese built hybrid and fuel-efficient vehicles such as the Toyota Prius and the Subaru line up rise in the coming weeks.

The cost of the imports are likely to go up as earthquake-related production shutdowns in Japan are reducing the supply of the autos at a crucial time for fuel prices.A time when consumers are increasingly shopping for gas-sipping models.

"The Prius will go from selling under invoice just a couple of weeks ago to over the sticker price a couple of weeks from now," said Jesse Toprak, an analyst with car price information company TrueCar.com.

While Japanese automakers build most of their bestsellers in the United States, some models are still assembled and shipped from Japan. A handful of those vehicles are already in tight supply in the U.S. because they are either hot sellers, such as Subaru's Forester and
Impreza, or fuel efficient vehicles, such as the Prius or Fit.

"We are doing a wait and see," said Dianne Whitmire, fleet director for Carson Toyota. "They are still assessing the supply issues in Japan. I hope it doesn't go back to dealers' marking up over sticker. But it looks like cars are heading back to MSRP."

Consumers will start to feel the crunch at the end of this month and into April, and the length of any price spike will depend on how quickly, and how completely, the Japanese auto industry can get back on line, analysts and dealers said.

In at least one measure of sales, Prius prices have already risen $169 to an average of $25,629 in the last week, according to TrueCar.com's listing of upfront, "no haggle" deals.

The Subaru models already have inventories of fewer than 30 days, and that's making dealers nervous.

"We are very concerned. We have no idea when we will see production start up again," said April Somers, general sales manager of Timmons Subaru in Long Beach. "Subaru was getting them here as fast as they could, and we were selling them real quick. Probably prices will rise."

The dealership has enough vehicles for a couple of weeks, "but we will really feel this in 30 days."

Toyota and other automakers in the beleaguered nation extended manufacturing suspensions Wednesday as they continued to assess the damage and to conserve energy to help Japan deal with multiple nuclear reactor generator failures.

IHS Automotive, an industry research firm, estimates that that as many as 185,000 vehicles were not built since the quake and that the number will continue to grow. March is typically the biggest month for Japanese auto production.

Automakers on both sides of the Pacific Ocean also are trying to figure out whether damage to the supply chain — the thousands of small companies that build components for vehicles — will create production bottlenecks that could delay production both in the U.S. and Japan.

"Once you start looking at the small suppliers in Japan, you see a lot of problems for the automakers … the small ones that might have been washed off the map and no one even knows yet," said David Sullivan, a product analyst with the consulting firm AutoPacific.

The lack of a single part can shut down an entire assembly line, Sullivan said. One of the crucial areas is that Japan remains a major source for automotive electronics, even for cars built in the U.S.

"Cars today can have upwards of 30 microprocessors in them. If some of those are coming from Japan it can have a ripple effect through the entire industry here," Sullivan said.

This is a worry even for European manufacturers. There is now a six- to eight-week supply of the semiconductors available to plants in North America and Europe, said Brian Johnson, an analyst at Barclays Capital. One automaker told Johnson that it would be a least a week before the manufacturers know the status of their semiconductor suppliers.

He said the "supply chain impact" of the quake is the biggest concern for the auto companies at this point.

Another issue is electrical power. Japan is going through a series of rolling power cuts that will continue at least until the end of April, officials of the Tokyo Electric Power Co. said. Auto factories and semiconductor plants are huge users of electricity and don't like power interruptions. The ovens in an auto plant paint shop can take as long as 10 hours to reach the correct temperatures, said officials. Having periods in which the power might go off makes it difficult to plan vehicle production, they said.

No comments:

Post a Comment