Japan Earthquake

As you will know, Japan was hit by an 8.9 magnitude earthquake on 11 March 2011. First and foremost our thoughts are with those directly effected by this tragic event.

We have been communicating with the local manufacturers to gauge the impact on vehicle supply and componentry and how this is likely to effect the New Zealand market.

Japan is the second largest supplier of cars in the world and although few plants were seriously damaged, the availability of staff and rolling power stoppages will impact production for months to come. The cost per day for non-production of vehicles has been estimated at US$200 million per day. One third of global car production will be cut because of supply chain disruptions, which means approximately 5 million vehicles will not be built this year. To give you an idea of the scale, the New Zealand new car market was 82,000 in 2010, so it would take New Zealand 60 years to sell that many vehicles.

At this stage, we have been informed that 250 component factories have been affected. These factories supply parts to the vehicle assembly process, meaning that even if vehicle production comes back on line, there will be a shortage of parts to complete the manufacturing process. Media reports from 23 March suggest that production of 400,000 vehicles has already been lost. You should be aware that the loss of the component factories not only affects Japanese brands of vehicles, as some Australian and European brands also source parts from Japan.

New Zealand will not experience the real effect of supply issues until May/June, but given that we are such a small market in terms of global vehicle sales, New Zealand will not be at the top of the list when full production resumes.

What do we expect to happen?

Vehicle supply issues across most brands
Parts for panel and mechanical repairs will be affected, causing delays in repair times
Tyres in some sizes will be in short supply
Possible increase in new car and parts prices as manufacturers attempt to recover the massive costs of the loss of production
Fewer choices in vehicle availability
Probable increase in used car values

We will try to keep you informed as new information is released by the media or through our international LeasePlan channels.

In the meantime we are encouraging all of our clients to secure orders for replacement vehicles sooner rather than later.  You need to act quickly to avoid delays in the supply of vehicles that have come about as a result of this tragedy. Our goal is to make the management of your fleet as easy as possible.

If you have any queries or questions please contact you LeasePlan Account Manager or our Client Services Team on 0800 LeasePlan (0800 532 737)


The Team at LeasePlan