The Madeleine Brand Show for March 9, 2012

Japanese auto industry still feeling tsunami effects one year later

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Brand new Toyota cars are displayed on the sales lot at Toyota Marin. Toyota Motor Corp. reported a 75 percent decline in quarterly profits with earnings of 25.4 billion yen ($314 million) compared to 112.2 billion yen a year earlier.

This Sunday marks the one year anniversary of the massive earthquake and ensuing tsunami that devastated Japan. Not only is the country still recovering from the loss of thousands of people and homes, things haven’t been the same for one of Japan’s biggest exports: cars.

Michelle Krebs, an analyst at Edmunds.com, will join the show to talk about how the Japanese disasters shook up the world of auto sales.

Toyota, which enjoyed a brief stint as the world’s most popular car maker in 2010, fell a few notches while American carmaker GM recaptured the top spot. Meanwhile, Korean carmakers are up-and-coming.

While all the Japanese car makers were hurt in their immediate vehicle availability in the aftermath of the tsunami, more damage was done in the long term to the manufacturing supplier base for parts, a hit which was felt world wide.

But Japan has almost returned to normal and Toyota has even opened up a new plant in Mississippi; while Nissan, the first to rebound, has gained significantly on the big two Honda and Toyota.

Perhaps more problematic long-term, however, is the fluctuating value of the yen, which has seen Japanese car makers cut corners on certain aspects of their cars. For instance, the newest Honda Civic has come under fire for what is perceived to be an inferior interior.

And with the landscape for small cars becoming even more competitive - with successful offerings from Hyundai, Kia, Ford and GM - the Japanese dominance of the small car market seems sure to face continued challenges.

Guest:

Michelle Krebs is a senior analyst at Edmunds.com.


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