While U.S. sales executives at Japanese companies are taking an optimistic “wait and see” attitude about the effects on sales of Japanese brands of Japan’s triple tragedies – earthquakes, tsunamis, nuclear meltdowns – they also acknowledge that since Japanese imports here are based on relatively short pipelines that U.S. buyer defections to competitors will become possible after the next 40 to 60 days.
However, negative “delayed delivery effects” might not be immediately apparent no matter what happens as the latest U.S. study shows. It seems that potential buyers polled have strong brand loyalty and are willing to wait for vehicles as long as 90 days or more.
In the U.S., numerous Japanese transplant factories will be able to make some more cars to substitute for earthquake delayed vehicles if – and a big unknown at this time – parts supplies are not interrupted.
Sorting this is going to be a nightmare of logistics and statistics, and it will also vary considerably by product line and company.
After three months, though, defections by buyers of earthquake delayed vehicles become more significant, according to CNW research just released. So called “intenders” start to defect at the following projected rates: Toyota, -14%, Nissan, -19%, Honda, -8%, Subaru -13%. This means that 14% of the people who say they intend to buy a Toyota say they are likely to go elsewhere after 90 days.
For comparison at 90 days of delay Ford is -6%, Chrysler -7% and General Motors -9%. All of these Detroit Three are much weaker in car loyalty so their averages are bolstered by stronger truck loyalty averages after 90 days delay in trucks, segments they dominate. Some of this reflects that truck buyers are used to specifying the equipment on their vehicles and are accustomed to waiting.
It also means that there might be less opportunity for the Detroit Three to increase car sales than some pundits think.
Then the question arises where will disappointed “intenders” go? In low priced segments the Korean firms of Kia and Hyundai are a good hunch, but neither has a big inventory or much unused capacity available in the U.S. due to their own growing sales during the past two years. They are also in the middle of crucial new product roll-outs, and will not be anxious to take chances on causing quality problems.
All is speculation at the moment – awaiting data that will be months in appearing.
And above all keep in mind:
The marketplace could change drastically if makers running out of inventory institute incentives in the form of loyalty programs with cash or rebates, low interest finance rates, extended leases and mileage allowances.
It’s been done before.
Statement by U.S. Nuclear Regulatory Commission:
NRC analysts overnight continued their review of radiation data related to the damaged Japanese nuclear reactors. The analysts continue to conclude the steps recommend by Japanese authorities parallel those the United States would suggest in a similar situation.
The Japanese authorities Monday recommended evacuation to 20 kilometers around the affected reactors and said that persons out to 30 kilometers should shelter in place.
Those recommendations parallel the protective actions the United States would suggest should dose limits reach 1 rem to the entire body and 5 rem for the thyroid, an organ particularly susceptible to radiation uptake. The currently reported Japanese radiation measurements are well below these guidelines.
A rem is a measure of radiation dose. The average American is exposed to approximately 620 millirems, or 0.62 rem, of radiation each year from natural and man-made sources.
(A new nuclear plant has not been built in the U.S. since 1979 – editor)