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What affect does the crisis in Japan have on the auto industry in the U.S.?

Actually, a lot more than you may think. As if the dealer and plant closings and the unfortunate bankruptcies were bad enough. Here comes news from Japan of an Earthquake followed by a Tsunami followed by the now extremely good chance of a nuclear meltdown. How does this affect the U.S. auto industry you might ask. Well here's how it does. The factories in Japan that produce U.S. bound cars for Honda, Toyota, Nissan, and Mitsubishi to name a few are offline entirely. Secondly, due to the tsunami, billions of dollars (with a B) worth of vehicles were lost or destroyed. That's going to hurt dealers world wide, not necessarily in the immediate short term as there is a supply of cars already at dealers, but in the coming months this will start to become a major issue for dealers.

The next issue that comes into play are the suppliers. Here's where it starts to become a much larger issue. Not only to the Japanese manufacturers get components from suppliers in Japan (some still haven't been able to be contacted for status updates), but U.S. and European manufacturers also get some components produced in Japan. This has already affected General Motors which has had to shut down production at their Shreveport, Louisiana factory which produces the Chevrolet Colorado and GMC Canyon. While this GM plant is the first to stop productions, others have scaled back production. So we'll have to wait and see now, what further issues arise.

Lastly comes the new scare of a possible nuclear meltdown. With each passing day, this is starting to look more and more likely to happen. Which is terrible in its own right. If a meltdown happens, the plants that produce vehicles and components in the projected radius (and it is many factories) will essentially become useless for decades. That means new factories will have to be built to take up the demand and get the industry back up and running.

We are monitoring the news closely in the wake of this tragedy and our thoughts and prayers go out to the people of Japan in this tough time.
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