Economy still feeling aftershocks

          While Japan struggles to clean up the war zone left behind by the tsunami that decimated it's northeastern coast on March 11, it's economy is starting to feel the aftershocks of the quake. Known as a hub for technological production and fuel efficient automobiles, Japan has been forced to reassess it's short term future as closures of plants have almost halted fabrication of things ranging from smart phone accessories to Toyotas.

“This is a serious situation, and it has the potential to affect many markets, including the Americas,” the executive, Carlos Tavares, said. “We are going to make sure we address the issues as fast as we can. We have a buffer, a cushion, that’s going to give us a little bit of time to bring things back on track.”  The New York Times

     The global economy that we live in ensures that what's affecting Japan will surely affect markets in foreign countries. Volvo, a car company based in Sweden has already reported a shortage of Japanese made GPS devices that it uses in the production of it's cars. Stating that they were on their last 10 days' supply with no signs pointing toward a new shipment coming soon, production there may also be coming to a standstill. 

“It’s hour-by-hour work to get a grip on the situation,” said Per-Ake Froberg, chief spokesman for Volvo, as it girds for a production halt. The New York Times

      Japan's shuttering of plants while trying to deal with the fallout from a damaged nuclear reactor and the tsunami cleanup has already impacted things closer to home here in California. Due to fears of shortages, the average price of a Toyota Prius has risen by nearly $1,800 and has many forecasting shortages of other fuel efficient models from Japanese brands as the price of oil continues to rise. Goudy Honda, one of Honda's largest dealerships which is located in Alhambra, CA is one of those dealerships bracing for shortages.

“In the short term we’ll have enough cars, but in a few months it’s going to be crazy,” Mr. Iskandar said. “We’re trying to buy as many used cars as we can. At least that’s an option if a customer wants a Honda. We could give them a year-old or two-year-old certified car.” The New York Times

      With the rising cost of oil now compounded by a semi-occupation of Libya by the United States and allied forces, the market for fuel economical cars surely didn't need another blow such as this one. This has created a type of perfect storm where smaller, fuel efficient Japanese cars are going to come at a premium as people try to escape the executioner at the gas pump.