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Japan crisis boosts car prices in U.S.; Dealers expect drop in models made there; no change in Buffalo

The disaster in Japan could slow shipments of popular cars like Toyota's Prius to American auto lots, and many dealers are already taking advantage of expected shortages to raise prices.

Buyers will now typically have to pay sticker prices, instead of enjoying discounts that had been the norm for small cars and hybrids imported from Japan. Besides the Prius, models that suddenly cost more include Honda's Insight, Fit and CR-V; Toyota's Yaris; and several Acuras and Infinitis.

Small cars such as the Yaris, with a $12,955 sticker price for a base model, and the Honda Insight, priced at $18,200, are losing their typical discounts of 5 percent to 10 percent.

The price increases "will last weeks, if not months," said Jesse Toprak, vice president of industry trends and insights for TrueCar.com, a website that tracks what cars sell for at dealerships.

But some Buffalo-area Honda and Toyota dealers said they have not adjusted their pricing policies in response to what happened in Japan.

John Davis, president of Don Davis Honda, said the dealership's inventory appears adequate at least for the short term. "I don't think we really have long-term guidance as to whether the incoming supply is going to be affected and when," he said.

About 80 percent of the Hondas his dealership sells come from plants in North America, he said. But certain vehicles, such as the Fit and Insight, are made only in Japan.

It is not just the production disruptions in Japan that could affect the U.S. vehicle market, Davis said. Rising gas prices, a prominent issue in recent weeks, can also push customers toward smaller, more fuel-efficient cars. "The demand may increase at the same time your supply is decreasing," Davis said.

West Herr Automotive Group sells Toyotas at two area dealerships and Hondas at one dealership.

"West Herr has not changed its pricing policy on fuel-efficient import vehicles since the earthquake in Japan happened, and to the best of our knowledge no other dealer in Western New York has either," said Annette Smith of West Herr.

David Wilkinson, general manager of Northtown Toyota, said demand for the Prius is on its way to exceeding supply, but not because of what occurred in Japan. Demand for the Prius -- made only in Japan -- had already picked up in light of higher gas prices, and Toyota had entered the year with a conservative output of the vehicle, he said.

Toyota vehicles made in Japan typically take 60 to 90 days to make their way here, Wilkinson said. So if there is impact from overseas, it likely wouldn't be felt for another two or three months, he said.

But the vast majority of Toyotas sold here are produced in North America, he said. "If there is an effect, it will only be on certain car lines," he said.

Nationally, dealers are acting on the possibility that disruptions in car deliveries from Japan will cause a shortage of higher-demand vehicles. Demand will exceed supply.

So they won't cut deals on those cars, Toprak said.

Many smaller cars and hybrids are built in Japan, where car manufacturing has mostly stopped after the earthquake, tsunami and nuclear crisis.

Toyota says it has shut down production until Tuesday. Honda remains closed and hasn't said when its plants will restart. A shipment of more than 1,000 Nissan and Infiniti cars that was headed to the United States was destroyed in the tsunami. At least one hybrid battery maker is shut down, threatening supplies of hybrid cars.

Some critics say dealers are using Japan's disaster, and the threat of car shortages, as an excuse to raise prices. Eric Ibara, director of residual price consulting for Kelley Blue Book, said any price hikes now are "pure speculation" that some models will face shortages.

Toyota declined to comment.

Honda spokesman Jeffrey Smith said the automaker is still assessing the impact of the Japan crisis on its supply of cars. But for now, U.S. dealers have enough Japanese imports on hand, and more are on the way, he said.

Used cars may be affected, too. Higher prices on new cars will mean higher prices on used ones, said Tim Jackson, president of the Colorado Automobile Dealers Association.

News Business Reporter Matt Glynn contributed to this report.

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