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Japanese Car Markers Losing Ground

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author photo by J. Mark Sternberg October 2011

The March 11 earthquake, along with the tsunamis, aftershocks and nuclear disasters that resulted devastated the Japanese automotive industry. Now as Kelley Blue Book releases its monthly market report, the full effect of the quake is starting to show.

KBB says it estimates Honda and Toyota alone have lost around 350,000 sales due to the disasters. To put a dollar sign in front of it, the company estimates somewhere between $5 and $3.2 billion have been lost, and the companies still aren't out of the woods yet. Supply issues are still hurting some aspects of the manufacturing process in Japan.

American cars have enjoyed a huge boost in sales while Japan struggles. General Motors has led the pack with an extra 130,000 cars sold over last year's figures, accounting a boost of more than $3 billion in revenue.

Hyundai has seen the second biggest benefit at around 120,000 more cars sold for an extra $2.5 billion in its coffers.

Though the immediate impact of the earthquake is surely the main cause for the decline, some credit has to be given to Japan's rivals. The cars out of Korea in particular have been improving steadily over the last decade and even European car makers are starting to see the likes of Hyundai and Kia as a threat.

The compact car segment has been traditionally dominated by the Japanese, but cars like the Chevy Cruze, Hyundai Elantra and Ford Focus have been well received and offer strong value for money. With a shortage of Corollas and Civics on dealership lots, American car buyers are getting a taste for the competition's latest and greatest.

Nobody really expects the likes of Honda or Toyota to take this lying down. The two car makers are stepping production back up and a fresh batch of new cars are set to hit American shores soon. KBB said it expects the companies to start offering up $1,000 rebates to try and claw back some of the difference.

Whether Korean cars can take down the industry giants like Toyota and Honda did to the Big Three remains to be seen, but with refreshed competition and opportunity hanging in the balance, American car buyers are likely to be the ones who benefit.

This image is a stock photo and is not an exact representation of any vehicle offered for sale. Advertised vehicles of this model may have styling, trim levels, colors and optional equipment that differ from the stock photo.
Japanese Car Markers Losing Ground - Autotrader