In 2011, one of the largest earthquakes in history, known as the 2011 Tohoku earthquake, rocked the coast of Japan, followed by a devastating tsunami. Two years later, Japan is still facing the consequences of the earthquake and tsunami. Tohoku earthquake caused multiple explosions at a nuclear power facility, and had a profound impact on the global automotive industry.
Due to the earthquake and subsequent tsunami, Japanese auto manufacturers stopped their productions. They also stopped their production in US and EU. Everything was shutdown. This production stoppage led to loss of revenue which caused the shortage of parts and a great adverse impact on their financial performances. The top 3 Japanese car companies’ production loss was at least 25,000 units. The earthquake also strengthened yen which caused the car companies to lose their price competitiveness.
However, there were other kinds of impacts on the global auto industry. Due to the production cut by Japanese car companies, there were more growth opportunities for competing brands. Other foreign car brands became stronger, which led to a more competitive market. For example, Ford, Hyundai, and GM do not really depend on Japanese components, so they had an advantage in the market. The earthquake also urged car companies to develop more powertrain technologies in safer technology areas.
There were two different impacts of the 2011 Tohoku earthquake in the auto industry. However, everyone’s concern is the safety of Japanese citizens and helping them to recover from this catastrophe. Japan and its car makers are still challenged by this earthquake. I hope they recover soon.