Car prices may rise because of Japan’s earthquake image

Basic economics: When demand is going up, prices will rise.

And because the Japan earthquake could slow shipments of popular cars like Toyota’s Prius, more and more dealers are already taking advantage of expected shortages to raise prices.

While Japanese automakers build most of their bestsellers in the United States, some models are still assembled and shipped from Japan – the Prius, Subaru’s Forester and Impreza …

Toyota is perhaps the most vulnerable automaker, because it produces almost half its global output in Japan, compared to 25 percent each for Nissan and Honda.

The demand for fuel-efficient cars like the Toyota Prius was already up dramatically — the rebate on that car was pulled a couple of months ago when gas prices shot up. If those prices stay high and the production crisis continues, there will definitely be serious supply problems, IHS Automotive analyst George Augustaitis told bnet.com

“The Prius will go from selling under invoice just a couple of weeks ago to over the sticker price a couple of weeks from now,” said Jesse Toprak, an analyst with car price information company TrueCar.com.

“We are doing a wait and see,” said Dianne Whitmire, fleet director for Carson Toyota. “They are still assessing the supply issues in Japan. I hope it doesn’t go back to dealers’ marking up over sticker. But it looks like cars are heading back to MSRP.”

There has also been increased demand from importers in Australia, Canada, Africa and the Caribbean in recent weeks, Babwah told the Express by phone.

According to IHS Automotive, 185,000 vehicles were not built in the week following the quake and that number will continue to grow.