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Sixteen have been killed in “snow related incidents”, while thousands are stranded in Tokyo and surrounding area.
Last updated: 17 Feb 2014 11:50
Transport difficulties have left stores and supermarkets empty in many of the affected regions [AFP]
|Thousands of residents in villages and towns across Japan remain stranded three days after a snowstorm, despite the military intervening to help with the clean-up.
Japanese media reported that 16 people were killed in “snow related incidents” across seven prefectures affected by the weather and thousands have been injured.
Prime Minister Shinzo Abe said at a parliamentary session on Monday: “Thanks to the weekend’s snow in Yamanashi and Nagano prefecture, some areas have received the highest levels of snow ever recorded. Due to such things as having their roofs collapse, a large number of people have lost their lives.
“We will continue to work closely with appropriate agencies and organizations to protect citizen’s and do everything in our power,” he added.
A snow storm hit Tokyo and the outlying prefectures last Friday. Parts of Yamanashi prefecture, west of Tokyo, saw more than a 1.1m of snow, the most the area has seen since records began in 1894.
The blizzard left cars on the highway stranded and, in some cases, entire villages cut off from transport as snow covered roads.
With hundreds stuck in their vehicles, some towns opened up public buildings and provided free food and warmth, especially to drivers running out of fuel. With stalled cars adding to the difficulties of the cleanup, many prefectures have asked for military help in digging up the roads.
The snow has meant that the transport of goods as well as people has been cut off, leaving supermarkets and convenience stores empty in many parts of the affected regions.
Japanese car makers, including Toyota and Honda, were forced to suspend operations after the heavy snow disrupted their supply chains and prevented workers from commuting.
Confused why the various US manufacturing indices have been on a tear in the past few months? Perhaps the fact that GM dealer lots are so full of cars they just couldn’t wait for even more deliveries has something to do with it. Which is also why in addition to reporting sales numbers for November that were largely in line with expectations, amounting to 212,060 (even if total Chevy Volts sold YTD of 20.7K were -0.6% less than in the same period in 2012), or 13.7% more than last year (estimated called for 13.% increase), of which a whopping 51,705 was in the form of “channel stuffed” units to be parked on dealer lots.
In fact, as the chart below shows, in the past three months, GM channel stuffing has exploded and soared by 150K units (the most ever for a 3 month period) from 628.6K to 779.5K. This represents the second highest amount of channel stuffing and is lower only compared to the 788.2K units “stuffed” exactly one year ago.
And while the topic of channel stuffing is not new here, as we have been covering it closely for the past three years, it is of note that even “serious” media such as Bloomberg pointed out yesterday that across the entire US car industry, and not just GM, channel stuffing is now the highest it has been since 2005. Surely all this pent up demand is there for a reason: after all, as in every centrally-planned economy, if you build it they will surely come…
While the abundance of commercials for cars across all media this time of year is nothing new, the manufacturers (and even more so the dealers) are likely getting more desperate. As Bloomberg reports,inventory climbed to almost 3.4 million cars and light trucks entering November – at 76 days of supply, that was the highest for the month since 2005. This should come as no surprise as we previously noted GM’s post-crisis highs in channel stuffing as hope remains high that the recent slowdown in sales does not continue. The question, of course, is, “will manufacturers be responsible and curb production to keep inventory in check, or are some going to resort to old, bad habits and churn it out and then throw incentives on them.” We suspect we know the margin-crushing answer.
the levels harken back to early in last decade when steep price discounting was used to prop volumes,…
Excluding 2008 when the industry was heading into recession, LV inventory totaled 3.397 million at the end of October, highest for the month since 3.803 million in 2004. October’s 76-day supply, was the highest for the month since 77 in 2005.
By comparison, sales in 2013 mostly have run at highs dating to 2007, suggesting inventory is getting ahead of the curve.
GM just saw the biggest two month jump in inventory in the restructured company’s history.
Carmakers have boosted production to meet demand that has left the industry on pace for the best sales year since 2007. Swelling supply raises the stakes for sales in November after deliveries missed estimates in October and slipped in September for the first time in 27 months. If buyers don’t absorb enough inventory, more automakers, including Toyota Motor Corp. (7203) and Honda Motor Co., may need to follow Ford Motor Co.’s lead by trimming production to avoid margin-slicing discounts.
“Inventory has been so tightly managed, and it has been because demand has been there and production hasn’t been able to keep up,” Jeff Schuster, an analyst with researcher LMC Automotive, said in a telephone interview. “If you change that scenario around, the question is, does the discipline that we’ve seen the industry operate with lately stick around?”
“As the market begins to slow down and begins to peak, it’s going to get tougher for everybody,” Joe Langley, the head of North American vehicle production analysis for IHS Automotive, said by telephone. “Are manufacturers going to be responsible and curb production and keep inventory in check, or are some going to resort to old, bad habits and churn it out and then throw incentives on them? That’s what’s going to be interesting, to see how that plays out.”
Wesley Lutz, a Chrysler dealer in Jackson, Michigan, said his store has about 120 days supply of vehicles in stock, roughly double what he usually likes to carry. Lutz cited his anticipation of strong winter and spring selling seasons and his ability to borrow at less than 2 percent to finance the inventory on his lot.
“I’m probably not managing my inventory as well as I do at 8 percent, but I’m willing to roll the dice and stock some inventory in December and January, because I think we’re going to have a great market in February,” Lutz said by telephone. “We’re borrowing money so cheaply.”
“If it’s an underwhelming month, we’ll need to look to see if there are any decisions to start to ratchet back” production this month or in January, LMC’s Schuster said. “It could end up being the first real test that the industry’s faced since the restructuring.”
Sadly, there it is – due to intervention-driven low rates, mal-investment occurs from the bottom-up – and now we have the most inventory in 8 years… car makers and dealers (perhaps more so) will be hoping hard this season… the ‘field of dreams’ economy continues