Japan’s suppliers of technology based devices such as semiconductors, led, lcd screens, various electronics components as batteries and other sectors of the economy as in auto-parts supply chain and manufacturing have been disrupted and may potentially drive prices up.
The Japanese disasters that have caused these companies to temporarily cease production have not only disrupted the supply chain but has influenced manufacturing world-wide. The excess inventories that retail outlets and manufacturers that received their components from Japan towards a finished product supplied are now being consumed.
Items such as smartphones and Apple’s Ipad 2 will definitely be delayed as a number of the raw materials and components are sourced from Japan. Retailers will continue to sell what is on hand but may have a hard time in restocking their products. With a procurement deficiency looming certain items may also increase in price as Japanese suppliers scramble to recoup their losses and regain their margins before the pre-tsunami and quake levels.
If this is the case the supply chain multiplier effect will carry out throughout these manufacturers. The end result, an increase in prices. Another reason that prices will increase becomes a question of supply and demand. If certain products are delayed in manufacturing once current retail and warehouse stocks have depleted there just may not be enough supply to fulfill demand. If demand is higher than supply, simple economics says prices will also increase.
Since Japan is the third largest economy in the world will it also consume more oil to catch up to what was lost during the times of shutdown and will it increase its usage to ramp up to pre-disaster levels? Also how long may they take to regain their competitive edge ? Since there has now been a ban on some fruits and vegetables for export they will have to import the very same thing they have previously grown which could lead to a bigger deficit. A larger deficit could possibly mean higher corporate and personal taxes thereby driving up retail prices on computers, memory, smartphones, electronics and automobiles to name a few of the main consumer items that may be affected.
Some significant Japanese companies that have been impacted are:
- Toyota Motor company
- Nissan motor
As can be seen these are world players influencing everything from electronics to automobile production. Hopefully the Japanese are able to cope with the disruptions that the quake had to their supply chain and manufacturing capabilities. These disruptions may lead to an increased price for most consumer goods coming from market leaders as mentioned above due to a lack of product being available.
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