Japan’s Disasters Still Felt in Auto Financing and Supply
Three months after a killer tsunami and earthquake engulfed parts of Japan, one of the outcomes is shaping up to be an opportunity for U.S. car manufacturers and shoppers.
Japan-based companies are reporting dried-up inventories of certain car models. According to consulting firm A.T. Kearney, the roughly 197,000 car buyers who were leaning toward buying a Japanese brand this summer could increase to 328,000 by the fall. Industry watchers are saying those car shoppers may have to look elsewhere given the shortage of Japanese cars such as the Prius hybrid.
"They’re still dying to see more new auto loans," said Dave Colby, chief economist at CUNA Mutual Group, referring to credit unions. "We’re seeing some additional supply chain disruptions. One of the byproducts of Japan is temporary plant closures. When inventories get low, there is a tendency to get less aggressive on pricing. This may or may not include discount financing."
A number of credit unions have launched programs to help members with less-than-stellar credit scores. The recession has created 15 million new subprime consumers, Kearney found. From this group, the firm estimates that at current loan approval rates, approximately 530,000 customers would be locked out of the new vehicle market. This represents a $3.2 billion contribution opportunity for the original equipment manufacturers.