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Toyota and Honda Extend Shutdowns Through This Week, Prices To Rise

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On: Mon, Mar 28, 2011 at 9:27AM | By: Chris Weiss

Toyota and Honda Extend Shutdowns Through This Week, Prices To Rise

Two of Japan's Big 3 have extended production shutdowns until this weekend, in the wake of the earthquake and tsunami events that ravaged Japan on March 11. Both companies are experiencing issues with parts supplies and have been forced into extending shutdowns.

Honda said yesterday that it will extend the shutdown of two auto plants and a motorcycle plant until March 27. Toyota extended its shutdown until March 26.

Though both Honda and Toyota say that they have ample vehicle stocks in North America, analysts expect that shortages are imminent and prices on select vehicles may begin to rise as a result. According to the Associated Press, hybrids and small, efficient models from Toyota and Honda are at particular risk. Models that are imported directly from Japan, in whole or in part, are likely to see price hikes as supplies diminish. Specific models likely to be affected include the Toyota Prius and Yaris, and the Honda CR-V, Fit, and Insight.

Price increases are expected to begin as early as this week and could last for weeks or months. Hybrids and efficient vehicles are at particular risk because demand is high due to rising gas prices and uncertainty as to how the turmoil in Libya will affect those prices.

The uncertainty of the future of specific brands and models stems from the uncertainty and information deficit of rebuilding efforts in Japan. It may take several weeks to know just how badly Japan's auto-part infrastructure was damaged and how long it will take to get back up and running.

Though the parts shortages in Japan have yet to shut down North American operations for Japanese brands (many high-volume Japanese cars are actually built here), GM has had to stop production at the Louisiana plant that builds the Chevy Colorado and GMC Canyon due to parts shortages. It has also halted production on the engine lines of its Tanowanda plant in Buffalo, NY, a plant that supplies engines for those idled models. GM has indicated that the stoppages will last through this week.


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