Tsunami Remembered: An Unforgettable Mark
Just over a year ago, chaos reined in Japan as suppliers took on flood waters and OEMs scrambled to cover their supply chains. A nuclear facility stood in possible meltdown mode, and more than 15,000 individuals were declared dead or missing. With the massive earthquake and tsunami crippling a corner of the country on March 11, 2011, all the auto industry could do was sit and watch.
To put what happened into perspective, Auto Remarketing reached out to OEMs, dealers and industry analysts who all shared frank assessments of what the 9.0 magnitude earthquake off of the northeast coast of Japan on March 11 and the resulting tsunami did.
Before delving into vehicles both on the production line and in the showroom, TrueCar’s Jesse Toprak first focused on the human toll the disaster took.
“It was tough to think about the business angle because of the human aspect of the story,” the site’s vice president of industry trends and insights acknowledged to Auto Remarketing.
Kelley Blue Book’s Alec Gutierrez remembered exactly where he was when disaster declarations began filling all media outlets.
“I was at the NAAA/CAR Conference in Las Vegas when the earthquake hit, and I just remember staying up all night watching footage from my hotel room.,” recalled KBB’s senior market analyst for automotive insights.
Even a year later, Andrew Bernhard, director of global automotive operations for J.D. Power and Associates, paused to remember the victims before touching on any automotive-related consequences.
“We can never truly comprehend the immense tragedy that the country experienced and I would be very hesitant to comment — only that it amazing to see the resilience of the country and the people in Japan,” Bernhard told Auto Remarketing.
How Critical Japan Is to Global Auto Industry
If executives and consumers didn’t already know how much the Asian country meant to vehicles production and sales, the disaster placed a laser focus on the fact.
“Japan, including automakers, had long seemed invincible,” surmised Edmunds.com senior analyst Michelle Krebs. “Surely they were meticulously prepared for any disaster the way buildings in Japan supposedly were built to endure the frequent earthquakes that occur. Surely there was an emergency plan in place that would be perfectly executed. Instead, buildings fell, nuclear plants failed, auto plants and supplier facilities shut down — and the country was in confusing disarray.
“The March 11 earthquake and tsunami revealed the vulnerabilities of the nation and its industries, including the auto industry,” Krebs continued.
Bernhard took a similar path when discussing the manufacturing impact.
“It truly brought to light the industry’s complete reliance on the supply chain,” he declared. “Due to the recent hurdles the industry has faced and the implementation of multiple cost-cutting metrics — there was exposure to both production bandwidth and component inventory, and the lack of banked components and multiple sourced suppliers — led to the reduction in production (and for that matter, sales as well) for many OEMs.