The Japan Disaster And The Auto Industry

March 15th, 2011

The disaster in Japan has widespread repercussions for the citizens in that country, and our hearts go out to all affected. But the effects go far beyond the borders of Japan. This event has far reaching ramifications for the economy, including the automotive industry.
Of course you have the major car manufacturers, Honda, Toyota, and Nissan. Toyota was perhaps the hardest hit, as they have many plants in the vicinity. Many manufacturing plants cannot produce products anywhere near full capacity since there are rolling blackouts due to the nuclear power plants being off line.
Parts for other auto makers are manufactured in Japan, and supply disruptions are expected.
The port facilities that help load the ships that bring the product over to the US have diminished capacity as well. Some ports will be out of commission for months.
Tire manufacturer The Bridgestone Group has pledged 3.5 million dollars to aid in the relief efforts in Japan. Toyo Tires Group indicates that even though they have a plant right near the epicenter of the vicious quake, they sustained little damage to their facilities and can continue operations as normal once the blackouts are over. Many customers may need to wait to get tires mounted on Tire Changers if this disaster disrupts service for too long.
Stocks on Wall street in all effected industries have taken a significant hit due to this disaster, and continued uncertainty is expected.
There is speculation that this event could disrupt the auto industry greater than anything since WWII. Our prayers are with the people of Japan.

Japan Earthquake

Photo Courtesy BBC / UK


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