Japan tsunami brought home hard lessons for automakers
On the first anniversary of the Japan tsunami, the auto industry is returning to normal after some significant disruptions. But the face of the industry has shifted.
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But now, a year after the disaster, there is a different story. Aggressive sales and incentives helped Japan regain its lost market share to just under pre-tsunami levels in February.Skip to next paragraph
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- Frequent safety recalls by Toyota and Honda a year before the tsunami tarnished the reputation of both companies.
- All three US domestic automakers which worked aggressively to retool the market with vehicles consumers wanted: smaller, more fuel efficient, and affordable, but also stylish and technologically smart.
- US companies also got savvier about marketing cars to younger buyers, using social media and generally putting a new face on an industry that had, for a long time, needed reinvention.
The transition helped GM and Ford post record earnings in 2011. Even though Chrysler was third in sales, it may be the biggest success story, having posted its first full-year profit since 1995.
“Even before the earthquake, [Japanese automakers] were already experiencing some competitive issues,” Mr. Robinet says. “They will have to fight hard to continue to regain their market share more than buying it with low prices. They’ll have to regain it with strong product and continuing to focus on the consumer.”
Another challenge for Japanese automakers is the high exchange rate, which is making any product exported to the US less competitive. Robinet says it is likely that more Japanese cars, particularly luxury brands like Lexus, Acura, and Infinity, will start getting produced in North America as a result.
“You have greater flexibility moving closer to your customer. If you can build a high volume of luxury product closer to the customer, there are many less variables for the vehicle manufacturers to worry about,” he says. “One thing Japan is reticent about is risk. They want to mitigate and control and understand currency risk and inventory risk as much as they can.”
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