Just as the U.S. auto industry was expected to return to the fast lane, following the worst economic recession since the Great Depression, certain segments could be brought to a screeching halt this summer. With Japan’s recent earthquake affecting new-vehicle production both here and abroad, coupled with the civil unrest in the Middle East—which is driving up gas prices to unprecedented levels—many consumers in the market for a new (or used) ride over the next few months are in for a bumpy ride. Here, are five ways in which the earthquake in Japan could affect car sales—and you—this summer.
There could be a limited inventory of popular new vehicles.
Since the devastating magnitude-9.0 earthquake, many of the Asian-based makes like Acura, Honda, Infiniti, Lexus, Mazda, Nissan, Subaru and Toyota have been forced to cut production due to a disruption in the manufacturing supply chain. Ironically, Hyundai and Kia, which are headquartered in Korea, have two American manufacturing plants in both Georgia and Alabama. Unlike a number of automakers, both foreign and domestic, they aren’t being affected. In fact, both Hyundai and Kia are said to be making plans to go into overtime mode. So if you have difficulty finding a Toyota, Nissan or the like, the Korean automakers’ plans on having plenty of their hot-selling fuel-efficient vehicles available.
Popular paint colors may not be available.
Not only are imports impacted by Japan’s recent earthquake, but some American makes are being affected, too. According to inside sources, consumers in the market for a new Chrysler, Dodge or Jeep may find that such popular colors as Brilliant Black, Blackberry, Deep Cherry Red, Redline, Inferno Red, Bronze Star, Rugged Brown, Hunter Green, Ivory and Billet Metallic may be in short supply due to the paints being produced in one of Japan’s affected factories. And across the street at Ford, consumers may experience the same when looking for Tuxedo Black and some red paint shades. Consumers will be forced to either delay their purchase or switch colors.
A limited inventory will drive up prices.
With new-vehicle inventory expected to be slim due to the affects of the earthquake and Middle East conflicts, consumers should expect smaller discounts, if any at all, on a number of fuel-efficient vehicles with ties to Japan. Unfortunately, consumers who are in need of huge discounts to help cover the negative trade equity from being upside down—owing more on the vehicle than what it’s actually worth—will more than likely find larger discounts on gas-guzzling trucks, SUVs and sports cars.
New vehicle introductions could be delayed.
The next-generation Toyota Camry was rumored to be released at this month’s New York International Auto Show. However, the vehicle’s unveiling has been pushed back due to the earthquake. So consumers expecting to be in a newly restyled Camry this summer will have to wait a little longer. Also, Nissan is delaying production of the all-new Murano convertible, too. So while consumers may see this Fred Flintstone-like vehicle on this season’s auto show circuit, they’ll have to wait a few months before it actually appears at a dealership.
Used vehicle prices could rise, too.
With gas prices rapidly approaching the $4 and possibly $5 mark per gallon, consumers could be at a loss this summer when seeking out a fuel-efficient new vehicle. This will likely drive many consumers to the used car market seeking late model vehicles, which will cause prices in the used car market to continue rising. Vehicles like a used Prius, Toyota’s popular hybrid, could become a hot commodity, selling for more than what they did when they were brand new. Yes, this is like déjà vu all over again. We experienced this same issue with a number of fuel-efficient used vehicles two years ago—when gas prices skyrocketed. However, this time we have other factors to thank for the potential affect on summer car sales.