Image: The wreckage of a car
TORU YAMANAKA  /  AFP - Getty Images
The wreckage of a car from the March 11 earthquake and tsunami lies upsidedown at a service station of Japanese auto giant Nissan. Supply shortages and damaged factories are likely to mean higher costs for American motorists who have an eye on a new Japanese car, truck or crossover.
Image: Paul A. Eisenstein, contributor
By contributor
updated 3/22/2011 12:15:41 PM ET 2011-03-22T16:15:41

There are some tentative signs that the Japanese auto industry is slowly coming back to life after the deadly earthquake and tsunami that struck the country March 11. But American  consumers should brace for the likelihood that they will pay more for vehicles with Japanese nameplates in the months to come.

Nissan and Mitsubishi expect to have at least some of their factories back in operation this week, though industry officials warn that plans could change rapidly in the days and weeks ahead, reflecting ongoing uncertainty about factors as basic as communications and transportation.

Most Japanese auto plants remained idle 10 days after the disaster, at least in part because of the crisis at the Fukushima Dai-ichi nuclear complex and nationwide power shortage it has provoked.

The crisis has reached across the Pacific, with Japanese-made automotive parts in increasingly short supply. Several carmakers, including Toyota and Subaru, have curbed production at their North American “transplant” assembly lines, while General Motors’ assembly plant in Shreveport, La., is down for the week due to a shortage of Japanese-made parts. GM also is halting production at its Tonawanda Engine Plant, near Buffalo, and laying off 59 of 623 workers.

“The impact of this [crisis] has yet to unfold,” said Mark Reuss, president of GM’s North American operations, adding that the ripple effects of having Japanese auto suppliers close down — or their delivery pipelines disrupted — could be “bigger than anyone knows today.”

Deutsche Bank automotive analyst Rod Lache said it is “still too early to estimate the impact to the supply chain, or how long energy preservation measures (such as the rolling blackouts felt across much of Japan) could potentially limit production.”

But a report from IHS Global Insight contends that every major automaker will eventually be affected by the Japanese disaster and subsequent shortage of parts, probably by mid- to late April.

"It is not a matter of if, but when," said Michael Robinet, director of automotive forecasting.

So far the impact of the disaster varies widely by carmaker and supplier. Nissan and Toyota have a number of facilities based in northeast Japan, the region hit hardest by the disaster. On the other hand, Suzuki’s facilities are based south of the nation “and did not suffer any meaningfully direct impact,” said Kurt Sanger of Deutsche Bank.

But parts shortages and the power situation are wild cards that threaten all Japanese automakers.

Sanger said Nissan has between four and six weeks of imported parts for its North American plants, but he warned that Honda could face trouble as it gets ready to launch the all-new 2012 Civic if the supply line isn’t reopened by sometime in May.

Honda has announced it will delay taking some U.S. dealer orders because of delays in production.

For its part, Toyota has said it’s “making every effort to minimize any long-term impact on Prius availability.” But the timing of the crisis is especially bad for the world’s top automaker, as it prepares to launch several additional hybrid models that will share the Prius name as part of a new brand-within-a-brand.

With a key engine plant possibly out of commission for an extended period, Nissan is considering the possibility of shifting some production to a powertrain plant in the U.S. It could wind up shipping engines back to Japan once home market assembly plants resume operations.

American motorists who have an eye on a new Japanese car, truck or crossover may need to stretch their budget a bit more than anticipated.

A number of online services that track automotive pricing report that Asian makers and their dealers are already beginning to curb incentives and even raise prices in the wake of the crisis.

Story: Japan supply problem spreads as firms cut output

Darren Shuster, of, said Toyota prices increased immediately after the earthquake.

Japanese carmakers and dealers are also eliminating the rebates and other incentives they were offering prior to the Japanese natural disaster, according to Jesse Toprak, vice president of industry trends and insight at The impact, he warned, could last “weeks, if not months.”

Nissan was expecting to restart a number of component plants on Monday and bring up at least some of its assembly lines by mid-week. A senior Nissan official said the automaker is “tracking the situation hour by hour, part by part.”

The disaster at the Fukushima nuclear plant complicates an already serious crisis for the auto industry.

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The loss of the facility’s six atomic reactors is causing a headache for Japanese manufacturers, from steel producers to silicon chip makers, who are facing the nightmare of rolling blackouts.  Several automakers have reported suffering serious damage to casting equipment when molten metals briefly cooled during the blackouts.

Meanwhile, as the damaged reactors continue to leak radiation, there is growing concern not only about the impact on Japanese water and food, but also on the country’s manufactured goods.

"We do not believe there is any harmful radiation risk,” said Dave Reuter, vice president of communications for Nissan’s North American operations, but “should any radioactive material adhere to our cars or trucks we will take all necessary precautions to ensure harmful material is not brought into the country and transferred to partners, including customers.”

The crisis facing Japanese automakers comes at a bad time for American motorists — as  automotive demand typically peaks in the spring. Even if the current crisis proves short-lived, Japanese carmakers may try to use the situation as an opportunity to push up prices, hoping to counter the impact of the increasingly strong yen.

Strong competitive pressure from U.S., Korean and European automakers could force Japan’s automakers to rethink that strategy. But then again, the entire industry might see this as an opportunity to boost prices, something that was difficult to do during the recession, when even the most lavish incentives failed to bring car buyers back into showrooms.

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Explainer: Ten leaps forward in car technology

  • Image: Three-point seatbelt
    Volvo’s Nils Bohlin invented the three-point seatbelt in 1959.

    English physicist, mathematician and astronomer Sir Isaac Newton once famously wrote — with perhaps a touch of false modesty — that “If I have seen a little further it is by standing on the shoulders of giants.”

    Thus has the car industry incrementally improved from its primordial horseless carriage beginnings to the magic carpet ride of today’s almost incomprehensibly complex machines with their raft of safety, environmental and convenience devices adding to the basic transportation function.

    Here are 10 of the car industry’s most important technological changes.

  • 1886 Benz

    Daimler AG

    It all began with Karl Benz and his construction of a self-propelled, three-wheel vehicle powered by a single-cylinder 0.75-horsepower engine using a leather belt and two bicycle chains to transmit power to the rear wheels.

    However modest this beginning, with its exposed engine parts and whirling bits menacing anyone who examines it too closely, the 1886 Benz launched the industry and was the foundation of today esteemed Mercedes-Benz brand. (Maybe the leather upholstery was an early clue to the company’s luxury intent?)

  • 1912 Cadillac with electric starter


    The electric starter — invented by Charles Kettering at his Dayton Engineering Laboratories Co. (Delco) in 1911 — became standard equipment on Cadillacs in 1912, paving the way for all cars to feature electric starters. This accelerated the industry standardization of gasoline internal combustion engines over steam and electric designs. It also put more women behind the wheels of cars because prior to the electric starter they tended to avoid using difficult-to-start, hand-cranked cars.

  • 1914 Ford Model T

    Ford  /  Wieck

    Introduced in 1908, the Model T was just another low-end car from the multitude of regional manufacturers in this country. In 1914 Ford separated itself from its rivals and became (for a while) the world’s largest industrial concern as the result of the Model T’s assembly switching from small teams of craftsmen assembling each car to a moving assembly line of unskilled workers each contributing the same small bit to every car on the line. Construction time to build each car plunged from 12 hours and 30 minutes to 93 minutes, and the car’s price fell from $690 to $360, while annual sales mushroomed almost ten-fold and Ford doubled workers’ salaries to $5 a day.

  • 1930 Motorola car radio


    Next time a boom car rattles your windows at a stop light, think back to the days before Paul and Joseph Galvin developed the first commercially available car radio in 1930.

    The Motorola car radio overcame a host of challenges, including electrical interference, finding space in the car for the bulky radio components and making the radio durable enough to survive the pounding of primitive roads. The popular 5T71 radio debuted at the Radio Manufacturers Association convention in Atlantic City, N.J., following a demonstration drive from Chicago to prove its durability.

  • 1940 Oldsmobile Hydra-Matic transmission


    Today few new cars are sold in the U.S. with a manual transmission and a dwindling portion of the population even knows how to use one. We can credit this dismal state of affairs to the invention of the automatic transmission and its debut in the 1940 Oldsmobile.

    The original Hydra-Matic automatic transmission offered benefits in terms of efficiency that surpassed subsequent designs, but that approach was abandoned in pursuit of smoother gear changes, which were more important to drivers. The company touted the ability to navigate stop and go traffic and to park without stalling the engine as the automatic’s primary benefits, and those features continue to drive the technology’s appeal today.

  • 1946 Michelin radial tire


    Until Michelin developed the radial, tire design had evolved little from the dawn of the car industry. The radial moniker refers to the direction of the reinforcing belts, which are turned perpendicular rather than running parallel to the direction of travel as in bias-ply designs.

    The benefits include a more stable footprint, reduced fuel consumption, longer tread life and better handling. The near-absence of any kind of maintenance or attention required led the government to mandate tire pressure monitors in cars because drivers had long since stopped checking the condition of their tires.

  • 1959 Volvo three-point seat belt


    Volvo engineer Nils Bohlin invented the three-point seatbelt in 1959. The belt appeared in the automaker’s cars that year, and within a decade the belts were mandatory equipment in all cars sold in the United States.

    Bohlin’s background was in aviation, where he developed ejection seats, so he understood the necessity of securing the torso and not just the pelvis as the lap belt had done. The elegant simplicity of his solution is confirmed by the inability of newer seat belt designs to displace the three-point seatbelt 50 years on.

  • 1972 General Motors air bag


    While air bags didn’t become commonplace in cars until the 1990s, GM conducted a large field test of 1,000 1972 Chevrolet Impalas equipped with experimental air bags. Between 1974 and 1976, the company offered the world’s first production air bags in its cars, with the first appearing in a 1974 Oldsmobile Toronado. Though the company was prepared to build 100,000 air bag-equipped cars a year, only 10,321 were sold over three years despite a reasonable price of between $180 and $300 for the option.

    The Insurance Institute for Highway Safety confirmed the robust construction of the early system by testing two of the old cars in the 1990s. Neither car ran and even the radio and clock didn’t work in one, but the air bags still deployed perfectly in the institute’s crash lab.

    “What’s important to remember at this point is that the air bags GM put into those early cars worked fine,” wrote IIHS president Brian O’Neill in a 1993 letter to the New York Times.

  • 1995 BMW and Mercedes-Benz electronic stability control

    Mercedes-Benz USA

    These premium carmakers battled to be the first to introduce an electronic stability control system that automatically stabilizes a car in the event of a slide. Though these expensive V-12 models were the first to feature stability control, they quickly verified the technology’s value with significant reductions in crashes. Subsequent studies showed that stability control-equipped cars are about one-third less likely to suffer a fatal crash, a result that encouraged the U.S. government to mandate stability control for all cars starting in model year 2012. The real safety advantage of stability control is that in contrast to seat belts and air bags, which mitigate the damage that occurs in a crash, stability control prevents many crashes from happening in the first place.

  • 1996 OnStar telematics

    GM  /  Wieck

    In our increasingly connected wireless world, the notion that the car should connect to a network over which it can share information may seem like an obvious development. But it was less obvious in 1996 when GM’s OnStar division was launched, using analog cellular telephone technology to send information to drivers and to automatically report crashes.

    Today other carmakers have their own telematics services and each month OnStar is now responding to 2,300 crashes, 10,000 requests for emergency assistance and nearly 30,000 requests for roadside assistance.

Video: Factories try to get back on line


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