I’ll bet you never really thought about how an event of extraordinary magnitude, such as the recent earthquake and resulting tsunami in Japan, would affect American cars.
Well, the sad news, apart from the human tragedy, is that in 6 to 8 months we may be seeing a shortage of parts used in American made vehicles. Most of those parts will be electronics, but the possibility of them increasing in price is very real. That’s just the law of supply and demand.
The fact of the matter is that, although small Japanese cars are the hardest hit, they aren’t the only ones. Cars produced in North America aren’t immune. I just learned that General Motors had to shut down a plant that makes small pickups in Louisiana, reportedly because of a shortage of Japan-sourced parts. Components come from all over the world today, and a supply chain disruption can impact plants in different countries.
North American-built cars with both Japanese and American nameplates could also be affected by shortages of parts including computer chips, batteries, LCD monitors, and other parts made in Japan. The GMC Canyon is one vehicle affected by this crisis.
Do I think that GM will figure this out? Absolutely! Do I think that the shortage in parts will slow production or drive prices up? We’ll that’s just something we’ll all have to wait and see.
On a more immediate note, if you are reading this, you may not know that Freeman Grapevine has dedicated ourselves to aiding the American Red Cross with this disaster. Head over to our Facebook page and we’ll be donating money in the name of all of those who like the page.
Take a few minutes to peruse some of the Youtube videos of the devastation and you’ll understand the grave impact this disaster has already made.
Please come by our page and help us donate.