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Japanese Carmakers Feel the Heat Post-Quake

Shubh Datta
March 15, 2011

The earthquake and resulting tsunami that wreaked havoc in Japan on Friday and over the weekend is now seriously threatening exports from the country. Japan's elite auto manufacturers such as Honda (NYSE: HMC  ) and Toyota (NYSE: TM  ) ¬†are wondering if they will be able to produce and export cars amid this crisis and are attempting to determine how long their plants will be out of action.

Auto assembly plants in Japan are slated to remain closed until at least Sunday as the calamity has affected operations and thrown production schedules off track -- but those estimates could always be extended. Frequent blackouts and widespread damage to roads and ports are only adding to automakers' woes.

The earthquake has dealt a terrible blow to Japan's economy, the fourth-largest in the world, with some reports suggesting that repair costs would run tens of billions of dollars. For the past two decades, Japan's economy has been struggling and has just begun to show signs of recovery from a long deflationary period.

The impending crisis
Undoubtedly, the crisis is the biggest that Japan has had to face since World War II, with unconfirmed reports suggesting the death toll could top 10,000. The Nikkei 225-stock averag