TORONTO — The March 11 Tsunami in Japan is only now being felt seriously in the North American auto business.

"Vehicle sales in the United States slumped below an annualized 12 million units in May, undercut by a shortage of Japanese models on dealer lots," stated Carlos Gomes, Senior Economist and Auto Industry Specialist, Scotia Economics. (Gomes made his comments in the wake of a new report from Scotia Economics “Global Auto Report).

The report says car sales in North America softened in May, which is in contrast to the six-percent increase over the previous four months; and experts attribute part of that to the slowdown of supply from Japan.

"In fact,” said, “looking only at the month of May, last month’s volumes were the lowest since 1997. As in the United States, Japanese automakers accounted for most of the decline.

"During the previous four months, purchases had consistently remained above 13 million units,” Gomes said. “Excluding Japanese brands, sales continued to advance, climbing seven percent above a year earlier, led by double-digit increases for South Korean brands."

However assemblies have hit bottom and will post a sequential double-digit increase in the third quarter, boosting economic growth.

"Vehicle sales also weakened in Canada last month, with volumes slumping to only an annualized 1.40 million units from an average of 1.67 million in March and April," continued Mr. Gomes.

A rebound is expected once dealer lots are restocked later this year.