New Car Sales in Japan Hit 30-Year Low; Sales of Minicars Rising

3 December 2005

Nikkei. Japanese domestic new-car sales fell for a fifth consecutive month to hit a 30-year low in November of 305,569 units, excluding minicars (which are treated separately)—an 8.2% drop year on year.

This represents the sharpest drop so far this year, resulting in not only the weakest sales for a November since the 304,000 units sold in 1974, but also less than 60% of those in the peak year of 1989.

By vehicle type, sales of passenger cars with engine displacements of more than 2 liters plunged 13.5% in November. Sales of subcompacts, which have engine displacements of more than 660cc and no greater than 2 liters, dropped 7.2%.

The biggest reason for sluggish new-car sales seems to be the growing popularity of minicars. Buoyed partly by high gasoline prices, cumulative minicar sales from January to November came to 1.79 million units, up 2.6%. The proportion of minicars to overall automobile sales has risen to 33% from 23% in 1990.

Toyota and Nissan both suffered sharp declines in sales in November, year-on-year. Toyota was down 12.3% to 140,000 units, excluding Lexuses. Nissan declined 20.3% sales to 49,000 units.

In contrast, Honda increased sales by 3% to 37,000 on strong demand for the Step Wagon and other subcompacts.