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September 13, 2011  |  Comments
Japan’s Big 3: An inventory (and industry) rebound

Japan’s Big 3: An inventory (and industry) rebound

Following the 9.0 earthquake and tsunami that hit Japan in March, we have heard over and over and over again about the depleting inventory of the Japanese Big 3. Total car sales have slipped as consumers wait for inventory to come back. That wait is almost over, according to Mike Jackson, CEO of AutoNation. Jackson predicts that the automotive recovery will begin sometime in October. The recovery will start with manufacturers from Japan.

Let’s take a closer look at the current state of Honda, Toyota and Nissan, and what the future holds for these manufacturers.

Honda

Honda PromiseHonda has been the slowest to bring production back to pre-earthquake levels. To alleviate consumer’s concerns about their inventory, the Honda Promise was introduced. Basically, if you’re ready to buy a 2012 Accord or Civic, but you can’t find it in stock, Honda will honor the advertised price until the vehicle becomes available.

This year, Honda hoped for big sales from its redesigned Civic and CR-V. However, the 2012 Civic is still in short supply, while the CR-V had its launch date pushed back. In August, new vehicle inventories on the Civic had been so low, that it fell out of the top 20 cars sold in the month.

Future

Honda’s Chief Financial Officer Fumihiko Ike stated that October production will be up 25 percent over a year ago. As they ramp up production, you can expect to see your favorite Hondas begin trickling in until inventory levels return to normal by next year.

Toyota

Last year, Toyota was hit by a series of safety recalls of over seven million vehicles that affected its sales. This year’s earthquake had an even greater effect. Sales dropped by 13 percent in August from the same time last year. However, there is some light at the end of the tunnel. The Camry was able to take back its crown as the best-selling car in America. It had lost the distinction in June to the Chevrolet Cruze.

Future

Toyota has resumed 100 percent production to North America and adding overtime and Saturday shifts at certain plants to replenish dealership inventories. In fact, they have even pushed up the release date of the all-new 2012 Toyota Camry. Expect to find the ’12 Camry at dealerships and showrooms by mid-September.

Nissan

Nissan is further along in the recovery than Honda and Toyota. Sales were up 19 percent in August due to increased inventory and demand for the all-new Altima. Nissan let customers know that they have inventory by releasing commercials which poke fun Honda and Toyota:

Future

Even though inventory levels are back to normal, Nissan is not easing up on the competition. Nissan has released a new crossover convertible, the Murano CrossCabriolet and is rolling out new 2012 Pathfinders, Xterras, Frontiers, Versas and Rogues.

Moving forward

As we move forward, many analysts predict that the Japanese Big 3 will begin offering larger incentives as inventories return to normal. This could start a domino effect with other car manufacturers and lead to lower prices and payments on all cars as we head towards the end of the year.

About Adam Lopez

Adam Lopez is an advertising specialist at AutoNation's headquarters in Fort Lauderdale, Fla.
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