Did the Earthquake Also Shake Up Japan’s Chances in China’s Luxury Car Market?

Lexus LFA Supercar

*Lexus LFA supercar

A bit diverse from foreign carmakers, leading Japanese manufacturers export their luxury and exotic cars to China rather than producing them locally.  Due to the recent earthquake and ensuing tsunami, Japanese exports to China will likely suffer because Toyota, Honda and Nissan have already shut plant operations in Japan.  

The woes of the already reeling Japan may continue along shaky ground as they struggle to maintain a grasp on China’s luxury car market, a highly important segment.  Toyota, Honda and Nissan view China’s bustling luxury car industry as an opportunity to attract the country’s wealthier consumers and unload their luxury car models, like the Lexus LFA supercar.


Lexus Japan

*Lexus plant, Japan

China is currently the largest luxury car market in the world, and growing.  Automakers unloaded around 500,000 high-end and luxury cars in China last year, a figure projected to double within the next five years.

Toyota, Honda and Nissan all utilize mass supplier bases in China, which provide an estimated 80-90 percent of auto parts used locally.  The issue lies in the fact that these companies keep production of premier models in Japan, which has forced them to charge higher prices, keeping market share low.

Nissan Plant Japan

*Nissan plant, Japan

Honda Japan

*Honda plant, Japan

To put things into perspective, according to Goldman Sachs, ceasing auto production in Japan for one day would impact Toyota to the tune of $73.3 million, and $24.7 million for Honda and Nissan.  Will Japan find a shift in their system? 


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