Honda Stops Taking Orders; Dealers Prepare for FewerSales,HigherPrices

Still struggling to recover from the earthquake and tsunami disaster, Honda says it will stop taking orders for vehicles made in Japan until further notice. It also delayed the introduction of the restyled CR-V crossover for at least a month.

Car dealers, meanwhile, are bracing for a shortage of cars but higher profit margins on the cars they are able to sell.

Consumers? No good news there. Prices will be higher, the selection less. Consumers' bargaining power will be just about nil except for those buying white elephants.

Models affected by the Honda announcement include the Fit subcompact, Civic, Insight and CR-Z hybrids and the Acura TSX, TSX wagon and RL sedan.

Honda now says it will probably not be back to full production until the end of the year, and supplies will be tight until then.

Honda plants in both the U.S. and Japan have been running at about 50% of capacity because of a shortage of parts from suppliers crippled by the disaster.

Product shortages

Dealer groups around the country say they have been told by all of the Japanese manufacturers to expect product shortages starting in June and lasting through the end of the year.

Dealers say they expect nearly all manufacturers to reduce or eliminate sales incentives, rebates and other promotions. Manufacturers that had been willing to cut margins for the sake of market share will now be struggling to get production back online and will be in no mood to wheel and deal.

Domestic brands will also be pricier and many will also be in short supply, as the parts shortage is affecting nearly all manufacturers, not just the Japanese.

With fewer new cars being sold, late-model used cars will be in demand and will command higher prices. Many dealers that usually sell traded-in cars at auction are holding onto them, anticipating they'll increase in value in the second half of the year.