May 17, 2011
May 17, 2011
New Vehicle Inventories Are Depleting Quickly
By Jose Mesa
José Mesa Auto Wholesale, LLC
It was not that long ago that earthquakes and tsunamis hit Japan. The effects are now beginning to hit us here in America as far as new vehicle inventories are concerned. Honda and Toyota were hit the hardest when the factories that made the parts as well as those that built the cars and trucks were forced to shut down. Some of the buildings were brand new and wiped out in minutes. Some were disrupted to a point where it would take months to rebuild. Some were hit and up and going right away but yet could not do anything since deliveries were impossible or employees could not get to work.
Honda and Toyota are saying that operations will not get back to normal until the four quarter of this year. These companies make some of the most fuel efficient vehicles and with fuel prices as high as they are these cars are in demand but yet there will be a shortage of these cars by the end of May.
Acura and Lexus vehicles are also affected since they are owned by Honda and Toyota respectfully. Normal allocations have been slashed by huge numbers and saying 75% is not out of line. When dealerships cannot get their normal allocations then there inventories deplete to nothing and catching up is no easy task when production is expected to be running well below the normal speed limit for many months to come!
It was just reported too that Ford has put a hold on all new Fusion hybrids since these parts also come from Japan. Many auto makes are also saying that many metallic colors will not be produced since those also come from Japan. If all the Japanese built cars and trucks will be hard to find then so will American vehicles because people will be switching to them. If new vehicles cannot be found then this will make the price of those new vehicles that are left go up and so will the price of used vehicles too. The entire world is being affected by this natural disaster in Japan.
Supply and demand of automobiles in the past years has been up and down like a yo-yo. Cash for clunkers wiped out inventories all over America. Then there were high fuel prices and you could not find a fuel efficient car anywhere. Now you will be faced with the devastation caused by the earthquakes and tsunamis in Japan. Regardless of what happens around the world Americans still want their automobiles and will end up paying whatever it takes to get one when they really need one!
This article was written by José Pinomesa who is the owner of José Mesa Auto Wholesale, LLC. JMAW is a retail auto dealer in Portland who has been selling new and used cars and trucks since 1992. For more information please visit www.josemesa.com.
no comments yet
Stay up to date with the latest political news and commentary from Oregon Business Report through daily email updates:
Prefer another subscription option? Subscribe to our RSS Feed, become a fan on Facebook, or follow us on Twitter.