PHILADELPHIA (CBS) — The effects of the devastation in Japan are expected to have a major economic impact worldwide as the story continues to unfold. Since Japan is a leading manufacturer of everything from cars to electronics, 3-On Your Side Consumer Reporter Jim Donovan takes a look at how the disaster is expected to effect supply and prices here in the United States.
This disaster has shut down much of the manufacturing in Japan for right now. So what does that mean for consumers in the United States? Let’s start with the auto industry. While most automaker assembly plants in Japan escaped serious damage. There are other factors to consider. Jeannine Fallon of auto website Edmunds.com says, “There are power issues, fuel issues, transport issues, there’s worker issues. A lot of people have fled the area and won’t be available to help rebuild.”
According to Fallon the disaster will affect car makers differently. 67 percent of Japanese brand cars are actually produced in North America. That is 79 percent of Honda’s, 72 percent of Toyota’s and 65 percent of Nissan’s. But on the other end of the spectrum only 16 percent of Mazda’s and only 8 percent of Suzuki’s are made here. Fallon says, “Those two companies are probably going to suffer the biggest hit as far in terms of total volume reduction.” Also, hybrids, which are made mostly in Japan, will also most likely see a slow down in supply.
Fallon says, “If you’re thinking about buying a Japanese car now is probably the best time to do it, because the prices may creep up as the disaster unfolds and as we determine what the supply is going to look like. The prices aren’t going to be going down, that’s for sure.”
As far as production of electronics in Japan are concerned, Money Watch Editor Jill Schlesinger believes the disaster may impact prices here soon. She says, “Right now manufacturing facilities up to 500 miles away are shut down. If those shutdowns persist for more than a couple of weeks we are likely to see increased costs down the line for chips and then maybe even the things that we pay for like iPads, iPhones and other smart phones.”
If you’re wondering about replacement parts for your vehicle. It’s still unknown what damage the suppliers are dealing with in Japan. The good news is that there are many companies that manufacture after-market parts even here in the United States. Many of those companies could increase production if needed.
Reported by Jim Donovan, CBS 3