The impact of the devastating tsunami and nuclear crisis in Japan are starting to be felt. There is an increasing lack of parts and added to rolling power blackouts, there are chances that profits will be affected. Loss of market share is becoming a possibility nowadays for the Japanese automobile industry.
A car can contain up to 30,000 parts. Losing one part can simply bring down the manufacturing of a particular model. Since the calamities experienced by Japan, global auto output has decreased by an amazing 1.1 million units.
The last time productions were massively decreased, Japanese auto makers ended up making big losses. Power and parts problems have come at the wrong time. Gasoline prices are hitting a record high in the U.S. This simply means that the need for fuel-sipping models like the Prius Hybrid is likely to increase and those models are made in Japan. Auto profits had just started to get back to pre-financial crisis levels.
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