Japanese tsunami led to 3-6% higher transaction prices for certain cars

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The earthquake and tsunami in Japan wreaked havoc on the automotive supply chain. Toyota, Honda and Nissan lost many thousands of units to the natural disaster, which meant that car buyers here in the U.S. sometimes had a difficult time finding and buying certain vehicles. We know how these disruptions hurt sales, but a study conducted by ALG shows that prices were also shifted because of the shortage of key vehicles.

ALG predicted that a 20-day production disruption would lead to 1.5-percent higher prices, and when production stoppage reaches 100 days, the anticipated spike in prices could be up to 10 percent. So, how'd it turn out in reality?

The study looked at the Nissan Rogue and the Honda Fit. ALG found that Rogue production was back up and running by May, and the CUV went up in price by three percent by June. That's a significant margin, especially when compared to the overall CUV price increase of .3 percent during that time.

The Honda Fit was even harder to find between March and June, and the numbers bear this out. The price of the Fit jumped by 5.6 percent during that time. The compact segment as a whole jumped by a still significant 2.3 percent during that time frame.

Hit the jump to read over the ALG press release.
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SANTA BARBARA, Calif., Dec. 21, 2011 -- The Japanese disaster resulted in a nearly 6 percent jump in new vehicle pricing for one key model, according to ALG, a subsidiary of TrueCar, Inc. and the industry benchmark for residual values and depreciation data.

After the March 2011 Japanese earthquake and tsunami, vehicle production in Japan dropped to record lows of roughly 40 percent of Q2 2010. The disruption in production caused a three-to-nearly-six percent increase in vehicle pricing on some models.

In April 2011, ALG provided an initial assessment of the potential impact on new vehicle pricing. Two scenarios were analyzed consisting of 20- and 100-day production interruptions (assuming complete production halt). ALG predicted that a 100-day interruption could result in a nearly 10 percent jump in new vehicle pricing for some key models, while a 20-day production delay could cause prices to rise approximately 1.5 percent on average.

"Japanese production has been slowly restored over the last few months, with August 2011 showing year-over-year growth again," said Eric Lyman, Vice President, Residual Value Solutions, ALG. "While supply shortages did push up new car prices in the short term, a relatively fast production recovery resulted in those spikes being less significant than originally predicted. However, actual pricing increases were within the estimated increases initially forecasted."

ALG looked at two key models and actual pricing increases: the Honda Fit and Nissan Rogue. The new vehicle price for the 2011 Honda Fit grew by roughly 5.6 percent from February to June 2011 compared to nearly 2.3 percent for the Entry Compact segment according to ALG's Auto Market Pulse data. This growth was between the 20- and 100-day scenario initially forecasted by ALG (1-2 percent for 20 days and 7-8 percent for 100 days). Honda's local production of small cars in Japan caught up to the previous year's level in August of 2011.

The new vehicle price for the 2011 Nissan Rogue grew by approximately 3 percent from March 2011 to June 2011 compared to a very flat Compact SUV segment growth rate of 0.3 percent. This growth was also between the 20- and 100-day scenario initially forecasted by ALG (1-2 percent for 20 days and 8-8.5 percent for 100 days). Nissan's local production in Japan of trucks and SUVs recovered faster than Honda's small car production, reaching near previous year's levels in May 2011.

For the complete ALG Japanese Earthquake Impact and other recent news, visit:

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