TSUNAMI Prices recede - Used cars cost less as Japan readjusts
Chad Bryan, Sunday Gleaner Writer
The ripple effect of the March 2011 tsunami which slammed into Japan leaving close to 19,000 people dead did not take long to rattle Jamaica's used-car industry.
Two weeks after the tsunami, Jamaica Used Car Dealers Association (JUCDA) President Lynvalle Hamilton sounded an ominous warning. He told Automotives that as "90 to 95 per cent of used cars sold in Jamaica come from Japan, … if things in Japan are not back up in, say, one year, the local market will definitely dry up".
The year deadline passed five months ago and Hamilton has a notably more upbeat outlook. He told Automotives that "a number of plants had been affected and when they started to pick up, Jamaica felt those effects perhaps in late December, early January".
The result is that, taking inflation into consideration, in Jamaica "prices are somewhat back to pre-tsunami levels. They are not totally, but pretty close. This seems to apply more to lower-end vehicles such as sedans and hatchbacks, which have reduced prices unlike the SUVs".
Last August, a 2007 Nissan March was advertised by a used-car dealer for $1,099,000, while a 2009 model was advertised last week Sunday for $1,200,000. A 2007 Nissan Teanna was advertised for $1,799,000 last August, the same year, make and model going for $1,550,000 this month. Also, a 2008 Honda Fit was adver-tised for $1,599,000, and this month one was being sold for $1,650,000. Of course, prices of motor vehicles vary for a number of reasons.
NISSAN PRICES FALL
The Nissan Serena, Bluebird Sylphy, and Tiida; Toyota's Noah, Corolla, Wish and Isis; and the Mazda Axela and Demio are among the models on which prices have been reduced.
It is not surprising that a number of Nissan and Toyota models are on the list. Nissan, which was the sixth-largest automaker in the world - behind Toyota, General Motors, Volkswagen AG, Hyundai Motor Group and Ford - had suffered severe damage, including giant cracks at a key factory. Five employees were killed.
In March this year, Automotives reported Nissan's remarkable recovery. Two days ahead of the disaster's one-year anniversary, Nissan Chief Executive Carlos Ghosn, called it "miraculous". In May 2011, the company's Iwaki plant in Fukushima Prefecture was almost completely restored to full operations.
Its March subcompact and Infiniti luxury brands had record sales of 4.67 million vehicles in 2011, up 14 per cent from the previous year.
Toyota, Japan's number-one automaker, had its fair share of challenges, which caused it to lose production of 370,000 vehicles - 220,000 of them in the first month following the disaster. Toyota, which produces the Camry sedan and Prius hybrid, was back to pre-tsunami levels in September 2011.
The recovery had long been promised. Although Toyota initially said it didn't expect production to return to normal until late this year, the automaker later said, in June, that production would be nearly back to normal in July. In August, it said it would be completely recovered in September.
As a result of the reduction in prices from Japan, used-car dealers should see an increase in profitability.
"Competition will definitely increase as the volume of people coming in to purchase cars will increase," Hamilton said.
The JUDCA president also pointed out that more cars will be imported, but that the volume is still not where it should be. Last year, about 5,000 cars were imported, down from 20,000 the previous year.