Monday, April 4, 2011

Crystal Ball: Final Nail In the Coffin and the Rise of a Superpower

We've watched scenes of horror and destruction thrown upon the shores and the people of Japan, that's a disturbing but true fact.  Another sobering fact for the Japanese economy, and specifically the auto manufacturing segment thereof, is the reality that the glory days are most definitively over. 

Fresh on the heels of the corporate gut-punch that was the sudden acceleration fiasco comes (thus far) unfounded fears from the car buying public of radioactive cars.  Green in every sense, slithering onto our roadways like the second coming of Godzilla.  A much more immediate and real danger is the utter disruption of the supply line in Japan.  Car makers in Europe and North America have felt some ripples that reflect the greater wave that is leaving assembly lines still and dark.  We here in the US can't order a Dodge Challenger in black due to a low supply of so-called "Xirallic", a key ingredient in some colors of paint including several shades of red and black, that is produced by only one plant that is currently not operational.  Contrast that to the problems of the car builders of Japan.  The folks at Toyota have seen their sales drop by half in the last month, Nissan's numbers down by 38% and Honda down by 28%.  It's a combination of factors; factories that have been shuttered, damaged or destroyed by the quake and tsunami, those that cannot operate because they can't get their necessary parts and materials to build vehicles, and would-be car buyers in Japan preoccupied with trying to stay alive.

Enter the Ninja
Hyundai (or as my Grandmother might say, "High-un-die") will take advantage of this disruption, fear and confusion, albeit purely coincidentally, by having showrooms filled to the brim, salespeople willing and able to take special orders, and offering what is admittedly superior design to anything Toyota has managed in the last few years to a public that is anxious to buy smart, attractive and inexpensive vehicles.

I can't say the Koreans will be able to maintain this momentum for more than the next decade, but I also don't see any reason why not. 

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