Japan Crisis Roils Automakers

Among the many medium-term ripple effects from the disaster in Japan are the disruptions it has only begun to cause for automotive brands in the American market – and in others worldwide – as automakers cope with breaks in supply of the many components and complete vehicles made in that country.

A continuum of effects is developing. At one end are, for example, U.S. Mazda dealers, who have had to suspend orders for their vehicles built in Japan. At the other end is Ford, which can’t paint more of its F-150 trucks in the U.S. in its Tuxedo Black now because of a lack of pigment for the color that is supplied by Japan.

There’s no telling yet how all this is going to sort itself out in the availability of models for various brands in the U.S. market. Some data will emerge in the industry’s monthly sales report for March, scheduled for Friday. But this saga will be unfolding over the next several weeks and months.

A couple of things appear certain: Some models, especially Japanese-made ones, are going to become in short supply; and dealers and consumers will be bidding up the actual prices of the most desirable of these vehicles despite auto makers’ best official efforts to discourage the practice.

Take Toyota, for instance. The company recently had reached the point in the United States where new supplies of its Prius hybrid vehicle were keeping up nicely even with rapidly expanding demand, as consumers seek a hedge against rising gasoline prices.

But Toyota had to halt Prius production for a couple of weeks after the earthquake and tsunami. And though it restarted Prius production on a "limited basis" this week, its plants are either closed or making only parts. There’s no telling what the recent supply bottleneck – and perhaps fears about future supplies – might do to showroom traffic and pricing.

And uncertainties over supplies also will be affecting the advertising that Japanese car brands do in the U.S. market in coming weeks. About two-thirds of American agency executives cited Japanese automotive and electronics brands as the categories most likely to experience cutbacks in advertising spending as a result of the disaster in Japan, in a new survey.

The second certainty out of all of this is that domestic American brands will be trying to take advantage. They’ve already taken their pause out of respect and concern for their Japanese competitors and their employees. Now, it’s back to business.