Six weeks after the March 11 earthquake and tsunami in northern Japan, there's still a lot of uncertainty among automakers about just how much damage has been done to the global industry's supply of components. One thing seems sure, though: You will pay more for a new car this summer than you would have otherwise.

"Prices will rise, generally," says industry analyst Jim Hall of 2953 Analytics. "Sometimes directly related to specific shortages, but also because the commodity parts will increase in cost due to the reduction of supply overall."

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Japan's biggest automakers—Toyota and Honda—are most directly affected by damage done to the region's plants and suppliers by the earthquake, tsunami and subsequent nuclear power plant disaster. For example, Toyota's plants are running at about 30 percent capacity (the company hopes to be producing at full capacity by this fall). But sticker prices are going up industry-wide, Hall says. Simple supply-and-demand equations suggest that these makers' most appealing cars will cost more as dealers dole out the remaining inventory.

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"Other automakers will take advantage of the situation," Hall says. "They'll raise prices because they can, because their competitors can't supply enough cars, so they can maintain or improve their profit margins in the interim."

Hall notes that Ford has bumped up prices as it introduces fresh products. "They say it's due to increased content in the car, but that's only true to an extent," he says. "They're also able to charge more because the Fiesta sets the new base line. It's absolutely going into improved profit." And if competitive products are in short supply, there's less pressure to maintain low pricing on the cars that aren't affected by the tsunami and earthquake aftermath.

Dr. Sean McAlinden, executive VP of research and chief economist at the Center for Automotive Research, confirms Hall's perception. "Automakers who don't have any particular parts supply problems will find that the weakened competition lets them charge more to offset the operating cost increases—they've seen parts prices rise, but also, like the rest of us, they're paying more for energy and transportation. With more competitive pressure, they'd have to eat those costs, but now they can recover them."

Hall thinks price increases attributable to the quake damage will run from two to four percent, averaging around 2.5 percent industry-wide. McAlinden estimates a two percent run-up between mid-March and September, or an annualized rate of four percent. Both say that only a portion of the increase will show up in the MSRP or sticker price. Actual transaction prices will go up more as automakers stop or reduce the marketing incentives—rebates and cheap financing—offered.

Consumers will likely pay a bit more for service on certain makes and models due to shortages of replacement parts that come from the same suppliers. McAlinden cites brake components, computer chips and climate-control systems as Japan-sourced parts that might be affected. Automakers often chose the supplier based on the price it charges for a part, so, where alternatives exist, the secondary provider who doesn't have the advantage of building large numbers for the new car market might charge more for the aftermarket part.

A lot of the so-called hard parts of a car are built around the globe today, though, so if a supplier in Japan goes down, it's often possible to find another in India, China or Malaysia to produce similar parts at the same, or lower, cost.

"It's still a very cloudy picture. The situation could be better or worse, depending on what we really find out in the next month or so," McAlinden says, emphasizing that automakers still don't have solid information about the damage to their supply chain. He said there's still some uncertainty about the first-tier suppliers, the ones who provide parts and subassemblies directly to the manufacturer's assembly plants, and even less information when it comes to the second- and third-tier providers of components and materials to the first-tier.

"Some automakers have already been able to shift their first-tier supplies," he explains. "But it may be, as you get into it, that you find that you're able to change the provider of, say, a circuit board to run your climate-control system. But then it emerges that all the first-tier providers are depending on the same company to make all the boards that they install circuits on. So, you've changed your supplier, but you still have the same problem."

Vehicles with hybrid drivetrains may be in particularly short supply this summer even as consumer interest in those cars rises with the pump price for gasoline. Toyota's Prius factory in northern Japan was surrounded by key suppliers who also provide parts to competitors. "They concentrated there because Toyota was pioneering in the segment and still holds a lot of the relevant patents," McAlinden says. "Even before the quake, there was some stress in the supply chain about who was first in line to get new components. As the primary customer, Toyota often got preference in terms of price and delivery schedules. Now, as the suppliers rebuild, the question will be more urgent—who's first in line as limited supplies become available again?"

At an industry conference in late March, McAlinden said that the incident reveals a certain weakness in the way the global industry has consolidated and concentrated its parts supply chain. There are between 20,000 and 30,000 individual parts in the average passenger vehicle, but it is increasingly the case that the same part from a single provider will be found in many products. "You might have a part that's in the Camry or Corolla that's also used in a Scion, a Prius and a Lexus," McAlinden explained. "Or, as with the hybrids, the same part might be used by Toyota and Ford and Subaru and a VW, say."

McAlinden doesn't expect the industry to have a clear picture of what's happened until the end of May. He suggests that in the longer term, automakers may see an advantage to sourcing parts closer to the assembly plants that build cars for a particular market. "This time it was a natural disaster in Japan, but next time it might just as easily be India or China or Mexico. Maybe its political unrest rather than a catastrophe like the tsunami," McAlinden says. "There could be wisdom in making sure you can get the parts you need in the local market where you build and sell the car."

What do you think?