Why did the earthquake blow the market value of flying cars in Japan?

Why did the earthquake hit the company?

The recent Japanese earthquake and nuclear explosion have caused Japan and the world to worry. Following the big fall of the week, the Nikkei 225 index fell by 14% on Tuesday for 15 days. The atmosphere of panic selling and panic-stricken escape is filled with investors and the public.

In the face of the destructive power of nature, we can only lament the smallness of humanity. However, when we experience a super earthquake, we may need to take a good look at the occasion of the loss of wealth. This is why the impact of the earthquake on Japanese auto companies is so great. Is Japan not a big exporter of automobiles? Isn't Japan building factories in major consumer locations around the world?

The answer is obvious. The loss is due to the Japanese auto companies' own faults, but also the enormous size and international helplessness!

First, when any large economic entity is large enough to be compared with a country, the impact of the Great Crisis on it is also unavoidable. If you look at Soros's theory of reflection, you will understand this more thoroughly.

Intuitively, the amount of auto trade from Japan to China will be affected. How big is the impact? You can look at the 2010 data. In 2010, Japan’s automobile exports to China accounted for three points—China’s imports of automobile products from Japan amounted to US$18.1 billion, accounting for 31% of China’s total imports of automobile products.

The earthquake affected the production of Japanese car companies. However, the greater crisis comes from a nuclear explosion, which affects the electricity supply throughout Japan and affects personal safety. Therefore, it is difficult for Japan to return to normal production in the short term and it is bound to reduce exports to China.

China is only a small window for Japanese auto exports, as well as other regions such as North America, which export far more than China. The disruption of this production disruption has made it difficult to estimate the impact of Japanese auto companies.

Secondly, along the first question, we next discuss why Japan is a big exporter of automobiles and has many factories overseas. However, is the local crisis still affecting its global industrial chain?

This is the problem of Japanese industrial layout. This problem exists in most industrial companies, including Japanese auto makers. The core components are mainly produced in Japan. Take the Chinese joint venture factory as an example, the localization rate is worth improving. For example, core components such as engines and transmissions are mostly imported from Japan. The earthquake and nuclear explosion just hit the spare parts supply chain. Coupled with the suspension of production at the factory and shipping disruption, a series of chain reactions have caused its overseas production to be affected (according to the analysis of the parts and components currently in stock, there is little impact in the short term. However, after one month, the impact will be fully apparent).

If the Japanese automobile company is regarded as a creature, its heart is still in Japan. This heart does not refer solely to R&D centers, but includes the production of core components. After hitting the heart, it hit Japanese car companies.

In the process of rapid development, Japanese auto companies did not notice this problem? Or does it not consider this to be a risk at all, but instead regards it as the best protection weapon - leaving core technology and production in Japan can ensure that technology does not flow out and can guarantee that competitors will not copy or even overtake? For quite a long time in the past, this is a weapon of high-speed operation of Japanese business. However, this accident made people find the weakness of the weapon. Or that the fate of the Japanese auto industry has been discovered.

When the disaster has passed, how will the Japanese auto industry examine the development pattern? Do they still continue the current pattern of local production of core components?

This is a mystery. In the next two or three years, we can observe slowly!