Japan shortages hit car, gadget buyers
Factories are running again, but shortages mean higher prices, less availability.
This Deal of the Day comes from Kelli B. Grant at partner site SmartMoney.
Six weeks after the earthquake and tsunami in Japan, most factories are back in operation. But new numbers show how even the brief disruption will keep prices high on autos and electronics through the summer.
Vehicles and electronics make up 37.5% of Japan's exports -- and account for nearly half of Japanese products the U.S. imports. Japanese exports declined a little more than 2% in March, more than twice what analysts expected, and even that seemingly small drop has a deep impact on American imports. The U.S. imported 27% fewer cars, 15% fewer computers, and 46% fewer MP3 players, speakers and other audio equipment last month, according to data from the Japanese ministry of finance.
Would-be car buyers are the most likely to notice higher prices -- if they can find the model they're looking for at all, says Jesse Toprak, vice president of industry trends and analysis at TrueCar.com.
Factories are still struggling to simply get parts and finished cars off the assembly line. Toyota, Lexus and Honda have said plants in Japan and the U.S. are working at 50% capacity at best, and GM has said it will close more U.S. plants temporarily, as it deals with short supply of parts. "Certainly at some point it will impact consumers," says a Honda spokeswoman. "We're still figuring things out." (Toyota and GM did not respond to requests for comment.)
Prius costs more
Already individual auto dealerships have cut cash-back offers and other incentives. Some are even charging more than the manufacturer's sticker price for in-demand cars, which analysts attribute to shortages. The average price for a Toyota Prius rose 2% in March and another 4% in April to a current $23,622, according to TrueCar.com. A Toyota spokeswoman says the company doesn't condone the price hikes, "but at the end of the day, the price is determined by the buyer and the seller."
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Electronics shoppers, on the other hand, will just have to be patient. Sony pushed the launch of its $1,500 3D camcorder to mid-May from what was supposed to be mid-April. Sony Ericsson announced that it is expecting short supply of two Android handsets (Xperia Acr and Xperia Play) and would delay the official launch of a third (Xperia Neo), already available in limited quantities, until the third quarter.
Neither Sony division responded to requests for comment. Nokia said in its first-quarter earnings report that it expected shortages of some phones, but declined to comment on which models would be affected.
History suggests those delays aren't actually so bad. Last year parts shortages spurred month-long waits for the iPhone, HTC Droid Incredible and Evo 4G, points out Shawn DuBravac, an economist for the Consumer Electronics Association.
Holding off a product launch has its advantages, too. It lets companies shift workers and resources to keep other products moving out of the factories, while fueling consumers' anticipation.
And by the time back-to-school shopping season rolls around, this may all be forgotten. Cars and gadgets are projected to be back on the shelves by then, and prices should ease somewhat, too, although they won't revert to current levels, warns Richard Ebeling, an economics professor at Northwood University in Midland, Mich.
The emerging culprit: inflation. Rising commodity costs and worries about the U.S. budget deficit have weakened the dollar, which has lost 9% of its value against the euro since the beginning of the year. "That could wipe out any cost savings of getting production back on track," he says.
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