Japanese earthquake hits auto production - and prices

(courtesy of Toyota Motor Corp.)

Japanese automaker Toyota has delayed the domestic launch of its Prius wagon, as the effects of this month's devastating earthquake and tsunami continue to impact production.

The automaker planned to begin deliveries of the new, larger Prius in Japan in April, but it confirmed this week that the date has now been pushed back and no decision regarding a rescheduled launch has been made.

The Japanese Prius wagon is set to be sold as a five-seater model in the US dubbed Prius V and as a seven-seater in Europe called Prius+, although the automaker said "no decision has been made in regards to a possible need to change the launch timing [of international models]."

Production of the original Prius, along with the Lexus CT 200h and HS 250h will restart on Monday, according to a statement March 24.

Toyota is reportedly facing a components shortage after damage to facilities and continuing transport disruption in the country, and it's not the only one - General Motors has suspended production in one of its US plants this week due to a parts shortage.

With production still at a standstill in many Japanese auto plants, automakers are racing to establish what the knock-on effect will be for consumers around the world but the scale of the disaster means it may still be too early to tell.

Although Toyota is believed to be one of the worst hit automakers, Nissan chief Carlos Ghosn warned this week that the number of suppliers facing difficulty in Japan would affect automakers internationally and Honda has also suspended production at its plants.

With global car inventory likely to tighten in the coming months, analysts have warned that the disaster could spell higher prices for buyers, with dealers less likely to discount models that are in short supply.

Edmunds.com analyst Michelle Krebs told AFP that "we can be sure new car prices will go up as inventory thins out."