Fisher Capital Management News Directory:Quake ups prices of made-in-Japan

The Yomiuri Shimbun/Asia News Network
Tue, Apr 12, 2011

(Above: Prices have risen on Japanese products at this electrical appliance store in Guangzhou, China.)
BEIJING, CHINA – The March 11 disaster has been affecting retail prices in China, particularly on home electrical appliances produced by Japanese manufacturers.
Chinese retailers have raised the prices of some types of Japanese products, and cases of price-gouging are suspected. Economists warn that if shortages continue of electronic parts and other products in which Japanese companies hold a large share of the global market, retail prices will rise and may damage the global economy.
A clerk at a retail store in Guangzhou, southern China, recently recommended to customers that they buy D700 digital cameras, a high-end model made by Nikon Corp.
“Tomorrow the price may rise by 100 to 200 yuan [about 1,300 yen to 2,600 yen],” he said.
The model cost 14,000 yuan (about 182,000 yen) before the quake, and had climbed by about 11 per cent to 15,500 yuan as of Thursday.
D700 models are manufactured in the company’s Sendai plant, which was damaged in the disaster. The factory resumed production in late March, but the store clerk said the price rose because “our inventory has declined.”
A car dealer in central Beijing has raised prices several times on the Land Cruiser Prado, a sport-utility vehicle with four liters of engine displacement made by Toyota Motor Corp.
Before the disaster, the price was 680,000 yuan (about 8.84 million yen), but it rose to 730,000 yuan. The price hike was equivalent to 650,000 yen.
Although the model is manufactured in China, Toyota stopped overtime work and operating on weekends and holidays due to difficulty in procuring parts.
An official of the car dealer said, “The model has been popular for a long time, but it’s increasingly difficult to obtain supply.” The dealer also discontinued a service to upgrade the interior of the cars.
Similar price hikes have been seen on the products of other Japanese makers, including Canon Inc. and Honda Motor Co. According to Chinese media, increases are spreading across the country.
Japanese and Japanese-affiliated makers in China have not raised their shipment prices since the quake. Thus economists assume the increases are occurring during the retail stage.
Retail prices tend to fluctuate more widely in China than in Japan, as a result of supply-demand balances.
However, “the latest price rises are especially large,” an executive of a Japanese-affiliated automaker said.
Zhang Yansheng, director of the Institute for International Economics Research of the National Development and Reform Commission, said, “The prices of Japanese products in China are going up because of expectations of future hikes or panic buying.”
The price of electronic parts also has jumped remarkably.
Yuan Gangming, a researcher with the Center for China in the World Economy at Tsinghua University, said: “Companies using electronic parts inside China will be affected. It may fuel China’s inflationary tendencies in the future.”
Some in China say there has been price-gouging as a result of parts shortages caused by the natural disaster.
In Beijing’s Zhongguancun district, which is similar to Tokyo’s Akihabara Electric Town district, the prices of external memory devices for personal computers that were believed to contain Japanese electronic parts surged just after the quake.
However, prices plummeted later, and there have been wild fluctuations in the cost of other products as well.
The owner of a retail shop in the Zhongguancun district said, “Jacking up the prices of digital cameras and PC-related products is price-gouging to take advantage of the earthquake.