Tuesday, May 10, 2011

Japan Crisis Effect Jaguar Production

The recent earthquake and Tsunami in Japan has caused Jaguar, Now owned by TATA Motors, to have some production problems. Although TATA Motors is based in India, as with the rest of the world, many of their parts and factories are based in Japan. At the current time, little has been released as to what items the company is facing a temporary shortage of. The problem with the companies supply, however, is that TATA Motors sources many of their products from Japan. The earthquake caused a shortage of the parts that come from factories in Japan. Most car companies source their products from other small companies, such as Samsung, or other large part makers. With much production occurring in japan, other companies besides TATA are likely to be suffering from the shortages. The effects on the market of Japan are likely to be catastrophic, because of all the money they will be losing during their time of rebuilding. Their factors of production are severely limited: their land is compromised, their labor is hard to come by, and their capital is extremely limited. Honda Motor Company is another foreign company that is affected by the tsunami. The company although they sell cars in America, has plants located in Japan which have 50% or less production rate at the current time. This is very hard on the market of Japan and also hard on the companies because they may have to spend more on parts. The United States however, may benefit from the tsunami. With the production of foreign cars such as Jaguar and Honda spending more on their parts and possibly having a shortage of vehicles available, American car makers are more likely to have the ability to compete both with price and quantity available. Overall, foreign companies who source parts or have plants in Japan are currently suffering from the earthquake and subsequent Tsunami.

George Collins



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