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Japanese Makers At Risk if Shortages Linger

Inventories could plunge by half.

by on Apr.05, 2011

Will normally loyal import buyers switch if faced with serious shortages of products like the new Honda Civic?

The ongoing crisis in Japanese automotive manufacturing could be the biggest setback brands like Toyota, Honda and Nissan have faced in decades should anticipated product shortages send buyers scurrying to check out competing products.

Dealers could struggle with barely half their normal inventory of Japanese cars, trucks and crossover in the coming months, warns the nation’s largest automotive retailer – while analysts say that rising prices could be an equally influential factor leading to mass defections by normally loyal import buyers.

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Nearly a month after Japan was rocked by a 9.0-magnitude earthquake and subsequent tsunami, a large portion of the island nation’s automotive assembly plants remain out of action or are operating at significantly reduced production schedules.  Though only a few assembly lines were damaged by the disaster, scores of automotive parts plants were impacted.  And compounding the situation, Japan continues to struggle with rolling blackouts in the wake of the crisis at the Fukushima Daiichi nuclear plant touched off by the quake and tsunami.

“Everybody’s in crisis mode,” said Michael Jackson, CEO of AutoNation, the Florida-based retailer that operated 243 dealerships in 15 states.