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Buying a Prius or a Leaf? Get It Now, Before the Japan Quake Disrupts Production

Japanese auto companies face major parts supply and vehicle delivery nightmares, but the crisis would be much worse if carmakers hadn't done an impressive job of moving much of their North American production to North America. But there's a major exception -- hybrid and electric cars. Most of those are still made in Japan, and that fact could severely disrupt the green car supply chain as the crisis that has shut down most of the industry continues. In fact, it's a double whammy, because many of the companies' fuel-efficient cars were already in high demand due to soaring gas prices.

As IHS Automotive analyst George Augustaitis told me:

The demand for fuel-efficient cars like the Toyota Prius was already up dramatically -- the rebate on that car was pulled a couple of months ago when gas prices shot up. If those prices stay high and the production crisis continues, there will definitely be serious supply problems.
The Leaf: outlook uncertain
One of the biggest problems is with the Nissan Leaf electric car, which was already in short supply on the ground in the U.S. Nissan said Monday that it shipped 600 Leafs March 10 and they will "arrive as scheduled." But those won't last long, and beyond that shipment it's cloudy, with six Nissan plants having sustained damage. The Oppama plant that makes the Leaf is among them, and it's closed until at least Wednesday. The company issued an ambiguous statement: "Future impact, if any, on Nissan Leaf supply continues to be assessed."

Nissan Americas produces 70 percent of its output regionally, but the Leaf electric car is entirely built in Japan. (A U.S. plant in Tennessee won't open until 2012, and a Sunderland UK plant in 2013.)

Nearly all of Honda's green car production is affected, and shutters on the Suzuka plant cuts off supplies of the Honda Civic Hybrid and CR-Z (the Fit Hybrid, too, but that's not sold in the U.S.).

Toyota most at risk
Toyota is perhaps the most vulnerable automaker, because it produces almost half its global output in Japan, compared to 25 percent each for Nissan and Honda. Toyota produces the Camry Hybrid in Kentucky, but not the much-more-popular Prius. In hindsight, it's unfortunate that a plan to build the Prius in Mississippi was abandoned.

Another big question is the flow of battery packs for the Prius, since the joint Toyota/Panasonic battery plant that supplies the car is located close to the epicenter of Sendai, Japan and is indefinitely shut down.

Toyota's return to normal operations is very uncertain. "Assessments of this kind take longer than one or two days, because we have to review not only our own plants but our Tier One and Tier Two suppliers," said spokesman Javier Moreno in an interview. "But it takes a week or two for shipments from Japan to reach the U.S., so we still have vehicles and parts in the pipeline."

Many Japanese plants were not affected by the earthquake, but the crippling of their parts suppliers may make production impossible anyway. IHS said the possibility of interruptions in critical components such as EV battery packs is "extremely worrying."


Photo: Flickr/Dave Pinter
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