Japan Auto Industry Forecasts Further Domestic Decline in 2009

24 December 2008

Passenger car demand in Japan. Click to enlarge. Data: JAMA

In its December forecast, the Japan Automobile Manufacturers Association (JAMA) projects that total sales of passenger cars and commercial vehicles in Japan in calendar 2008 should finish at 5.11 million units, a decline of 4.5% from the previous year. JAMA is forecasting a further 4.9% reduction to 4.86 million units in 2009. Peak new vehicle demand in Japan’s domestic market was in 1996, with 7,077,745 units, according to JAMA.

Demand for passenger cars is estimated at 4.25 million units (down 3.3% from 2007); for trucks, at 843,000 units (down 10.1%); and for buses, at 15,400 units (down 1.4%). JAMA attributes the decline in sales of both passenger cars and commercial vehicles to the economic slowdown and sinking consumer confidence caused by soaring fuel prices in the first half of the year, as well as a dramatically deteriorating economy, starting in autumn, resulting from the “US-spawned global financial crisis.”

The projection for 2009 is that the harsh economic climate prevailing in late 2008 will continue. Stagnant corporate earnings, sluggish consumer spending (due to deteriorating employment and income environments) and other adverse trends are forecast to result in a total demand for passenger cars and commercial vehicles of 4.86 million units, down 4.9% from 2008. Passenger car demand should reach 4.05 million units, down 4.8% from 2008, with demand for trucks and buses totaling 796,000 units and 14,100 units respectively, down 5.6% and 8.4%.

Standard and Small-Sized Passenger Cars. JAMA projects sales of standard and small-sized passenger cars in 2008 to be 2.82 million units, a year-on-year decline of 4.7%, and forecasts demand for this sector at 2.62 million units, down a significant 7.1% from 2008, reflecting the impact of continued negative trends such as sluggish consumer spending resulting from weak employment and income environments.

Mini Passenger Cars. Minicar sales in 2008 are estimated at 1.439 million units, down 0.6% from the previous year. In 2009, despite an anticipated continued boost from the new and restyled models introduced in late 2008, consumer spending is expected to remain weak owing to the adverse employment and income environments. As a result, total demand in this category in 2009 is forecast at 1.435 million units, a dip of 0.3% from 2008.

Standard Trucks. Standard truck demand in 2008 is projected at 147,000 units, down 14.5%. Demand for heavy-duty and medium-sized trucks is expected to finish at 74,500 units, a 16.5% plunge from the 2007 level. In 2009, sales in this category are forecast at 128,000 units, down 12.9% from 2008. Demand for heavy-duty and medium-sized trucks should stand at 62,000 units, a year-on-year decline of 16.8%.

Small Trucks. Small truck sales in 2008 are estimated at 252,000 units, down 14.0% from the previous year. The introduction of new models and other positive factors for 2009 should keep demand in this category at 250,000 units, a dip of 0.8% compared to 2008.

Mini Trucks. Mini-truck demand in 2008 should total 444,000 units, according to JAMA, down 6.1% from the previous year. In 2009, demand in this category is forecast at 418,000 units, down 5.9% from 2008.

Large Buses. Sales of large buses in 2008 are estimated at 5,300 units, a gain of 2.9% over 2007. Replacement demand for these vehicles is the main factor behind this growth. In 2009, demand for large buses will likely not exceed 4,200 units, plummeting 20.8% from the previous year.

Small Buses. Steady replacement demand will have helped sales of small buses in 2008 to finish at a projected 10,100 units, down 3.5% from 2007. In 2009 sales in this category should continue to be buoyed by replacement demand, resulting in a final annual sales performance of 9,900 units, a 2.0% drop from 2008.

Motorcycles. Total motorcycle demand in Japan in calendar 2008 is estimated at 570,000 units, down 21.1% from 2007. Declining sales have been recorded in all motorcycle categories except for the 51-to-125cc category. In 2009 sales declines are projected in all model categories, with total domestic motorcycle demand expected to drop to 498,000 units, down 12.6% from 2008.