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Large US dealer anticipates shortage of imported cars

EARTHQUAKE AFTERSHOCK Chief executive Mike Jackson said AutoNation Inc.’s supply of Japanese cars will start to drop in the coming weeks. EARTHQUAKE AFTERSHOCK
Chief executive Mike Jackson said AutoNation Inc.’s supply of Japanese cars will start to drop in the coming weeks.
By Tom Krisher and Dee-Ann Durbin
Associated Press / April 5, 2011

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DETROIT — Cars made by Japanese manufacturers will be in short supply in showrooms in upcoming months because of the March earthquake and tsunami, the head of the largest US dealership chain said yesterday.

AutoNation Inc. chief executive Mike Jackson said that customers will first see shortages of vehicles made exclusively in Japan, then parts shortages will slow down production of Japanese-brand cars assembled in North America. “Everybody’s in crisis meetings every day trying to figure out how to keep the global production system working as best as possible and adapt to the circumstances,’’ he said.

The March 11 disaster mostly damaged auto parts factories in the northeastern part of Japan, the world’s second-largest supplier of cars and parts. But shortages of those components, plus disruptions of electricity and water, have forced car plants in that nation to close or limit production for nearly a month.

Jackson said automakers have told him that the car shortages will last from two to four months, and AutoNation should expect a 30 to 50 percent cut in shipments of Japanese-brand models. Jackson said models made only in Japan, such as the Toyota Prius gas-electric hybrid, Honda Fit subcompact, and Nissan Rogue small crossover vehicle, will be most affected. Consumers can expect to pay higher prices for the models in short supply because dealers will be less likely to discount them.

Industry analysts say Detroit automakers, which also get parts from Japanese suppliers, will start to see production cuts as well because of the earthquake.

“To think that the Detroit Three will escape this would be in error,’’ said Michael Robinet, director of global production forecasting at IHS Automotive.

Jackson, whose Fort Lauderdale, Fla.-based chain has 243 new vehicle dealerships in 15 states, said his stores have enough Japanese-brand autos to sell for the next two months, but that supply will start to drop in the coming weeks. Supplies will fall even if production restarts quickly because it takes about a month for car-carrying ships to travel from Japan to US ports.

“While you have the supply [now], the reality is that because the plants aren’t producing, that’s going to dwindle going forward,’’ said Scotia Economics Senior Economist Carlos Gomes.

Parts shortages from Japan already are affecting auto production in the United States. Yesterday, Toyota said that parts shortages will force it to shut down all 13 of its North American factories, perhaps later this month.