Foreign used cars and parts threatened by Japan’s disaster

Car parts dealers for foreign used cars are already looking to source parts from other Asian nations as the situation in Japan worsens making exports out of that country impossible. Dennis Ramdhan, member of the T&T Auto Dealers Association (TTADA) and the CEO of D and D Auto World, of Carapichaima says spare parts could come from Singapore or Australia. Ramdhan pointed out that radiation contamination may prove the biggest threat. He said if all goes well and Japan’s reactor core does not melt down it may take Japan several months to get its transport infrastructure up and running. 

He said although one area felt the brunt of the massive earthquake, the damage done throughout Japan is tremendous, making freight of parts difficult at this time. He said vehicles damaged in the tsunami cannot be salvaged for parts since the salt water damage would have started the rusting process almost immediately. There is, he said, no immediate shortage of parts on the local market and does not foresee any hike in prices in the near future unless freight and shipping prices escalate and cannot be absorbed by local dealers. Ramdhan said he started dealing with new  vehicles out of China just around two years ago. He said these vehicles and new parts are around 50 per cent cheaper than vehicles coming out of Japan. Citing an example, Ramdhan said a new pick-up from China costs around $85,000. 

Cars may be in trouble

Visham Babwah, President of TTADA, said an atomic explosion in Japan would have a negative effect on the automotive and parts industry. Babwah pointed out that the new car industry has already been hit since Toyota and Nissan have shut down operations where they have plants close to the reactor. He said an explosion would undoubtedly push prices of used cars higher because of demand and supply issues. Babwah said the tsunami and earthquake caused damage to plants operated by Honda, Toyota, Subaru and Nissan.

He said reports out of Japan indicated that Toyota halted production at a parts factory and two assembly plants in Miyagi which has an annual  capacity of 120,000 units of the Toyota Yaris. “This factory, what we understand is not fully automated,” he said. Babwah said if production of new cars slow down and the Japanese economy feel a blow people would be forced to hold on to their cars much longer thus creating a shortage of used cars on the market. “Prices may go up, we have to wait and see, but Japan has been hit by an earthquake, a tsunami and now a reactor threatens. 

“These implications would affect not only cars but all trade out of Japan. There is the frightful issue of radiation contamination affecting all products leaving Japan. “The government of Japan had evacuated people living within 25 kilometres of the reactor. There is also the threat of environmental forces spreading radiation.” Babwah’s advice to local consumers with the cash who need cars, is to start purchasing as “we don’t know what will happen tomorrow.” Babwah said the importation of vehicles out of Singapore has slowed drastically because of legal issues arising with the importation of these vehicles.