2. Japanese Earthquake and Tsunami
Easily one of the biggest news stories of the year (not just in the auto industry but overall), the Japanese earthquake and tsunami wreaked havoc on one of the world’s largest auto industries, halting the manufacturing sector of major automakers including Toyota and Honda. The effects extended well beyond Japan’s shores, however, with the natural disasters showing the weakness of a global supply chain as factories in North America and across the world had to be temporarily closed over parts shortages. It wasn’t just the Japanese either, with companies like General Motors and Ford halting production on certain models due to missing components.
It took sixth months for production to fully resume, although considerable damage had been done. With a global economic downturn followed by floor matt related safety concerns, compounded by an aging product lineup, sales for Toyota struggled. Honda’s sales were also hampered, as supply failed to keep up with demand and dealers couldn’t get access to the cars they wanted.
A sign of the resilliance of the Japanese people, considering the devastation, it’s a miracle auto manufacturing was able to return to normal at all in 2011. And while the effects of the natural disaster continue to be cleaned up, the impact is also evident on the Japanese economy and the bottom line of automakers like Toyota. The world’s largest automaker by volume for three years running, Toyota is expected to slip to third in 2011.