News

The effects of the terrible earthquake and tsunami that struck Japan are being felt in a myriad of ways. None of them compare to the local impact, of course, and I’d urge everyone to donate to the relief support provided by the British Red Cross or Save the Children, but the repercussions on our market are starting to ripple through.

The suspension of new orders for vehicles built in Japan was almost inevitable and it’s remarkable to see just how quickly production has restarted since the events in March. Less apparent were the effects on producers further afield who rely on components or software for local production and European plants have been impacted quite substantially through supply chain issues.

Fortunately, parts supply for used cars and warranty repairs doesn’t yet seem to be too badly affected but time will tell whether there are repercussions for the average motorist on the street. Most parts providers are already making alternative arrangements in case of disrupted supply and there is a good stock of parts within the overall chain, so we’re not worried at the moment.

We’re watching the used car market quite closely as the impacts on car prices could be interesting, to say the least. Some commentators are suggesting that manufacturer could push right-hand drive specification cars into the UK new car market which would depress used car values, while others seem to think that a restricted new car supply is inevitable and that will strengthen used car prices. Whatever the outcome, this is uncharted territory for our industry and could help or hinder in equal measure.

All this makes us realise that we really do work in a global industry and that events on the other side of the world can have massive and direct impacts on local businesses and UK consumers. The car industry has a great habit of bouncing back in times of adversity and I hope that this bounce back is speedier and stronger than others.

To donate to the British Red Cross, please visit www.redcross.org.uk; for Save the Children, go to www.savethechildren.org.uk and make a direct donation.

By Tim Heavisides, Group CEO of Car Care Plan Holdings.

This article originally featured in Car Dealer Magazine.

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