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Customer LoginsJapanese new vehicle sales improve 7.2% y/y during April, YTD volumes fall 1% y/y
Japanese sales of mainstream vehicles slipped 3.2% year on year in March, while the minivehicle segment extended its declining trend for a 15th month.
IHS Automotive Perspective
- Significance: New vehicle sales in Japan, excluding mini-vehicles, totalled 212,713 units in April, up 7.2% year on year (y/y). Minivehicle sales slipped 7.5% y/y to 112,035 units, marking the 16th consecutive month of decline.
- Implications: Japanese sales of mainstream registered vehicles returned to positive territory in April after witnessing declines in the previous two months. However, for the year to date (YTD) period, the market shrank 1% y/y to more than 1.13 million units.
- Outlook: IHS Automotive forecasts a mild recovery for light-vehicle sales (including minivehicles) during the year in Japan to reach nearly 4.96 million units, which would mark an increase of 0.4% y/y. The ongoing Mitsubishi scandal is likely to hurt minivehicles sales in the country; however, the extent is yet to be ascertained. Nevertheless, in the long term, the delay to the further increase in consumption tax from the current 8% to 10% until April 2017 (from an originally scheduled October 2015) is expected to support the Japanese market, at least prior to April 2017.
New-vehicle sales in Japan, excluding minivehicles, totalled 212,713 units in April, a 7.2% year-on-year (y/y) increase from 198,371 units in the corresponding month of 2015, according to data released by the Japan Automobile Dealers' Association (JADA) today (2 May). Of the total, sales of passenger cars increased 8.4% y/y to 184,562 units, while truck sales declined 0.4% y/y to 27,089 units. Bus sales surged 13.2% y/y to 1,062 units in the month. Within the mainstream vehicle market, Toyota reported an increase of 9% y/y in sales in April, with 108,346 units. It was followed by Honda, which sold 24,027 units, up 8% y/y. Nissan was relegated to the third position with a 7% y/y decline in sales to 20,044 units. Mazda came in fourth with sales slumping 28% y/y to 9,441 units, followed by Suzuki with sales soaring 75% y/y to 8,403 units. Fuji Heavy, the producer of Subaru-brand vehicles, came sixth with sales of 7,885 units, an 11% y/y gain. Seventh and eighth positions were occupied by Lexus and Isuzu with sales of 4,510 units (up 52% y/y) and 4,184 units (up 13% y/y), respectively. On the last two slots, Hino and Mitsubishi reported sales of 3,681 units (up 20% y/y) and 2,110 units (up 38% y/y), respectively. In April 18,898 vehicles were imported into Japan, up 6% y/y.
Meanwhile, industry sales of minivehicles, categorised as vehicles with an engine capacity of up to 660 cc, continued to post negative results, slumping 7.5% y/y to 112,035 units in April, according to the Japan Mini Vehicles Association. The minivehicle segment was led by Suzuki, which reported sales of 39,821 units during the month, down 11% y/y. Suzuki was followed by Daihatsu, which posted sales of 37,029 units, a growth of 2.5% y/y. Honda recorded sales of 21,295 units, up 9.1% y/y, to take third place. Nissan occupied fourth position with sales slumping 51.2% y/y to 5,574 units, followed by Mazda and Fuji Heavy with 2,735 units (up 5.8% y/y) and 2,251 units (down 8.95 y/y), respectively. Toyota sold 1,844 minivehicles (up 16.2% y/y). Last on the list was Mitsubishi which sold 1,477 units during the month, down 45% y/y.
Outlook and implications
In late April, Mitsubishi and Nissan suspended production and sales of four types of minivehicles in Japan, after the former publicly admitted that its fuel-economy testing regime under Japanese regulatory requirements had underestimated the "coast down" and rolling resistance effects. The manipulated tests involved four popular minivehicle models: the eK Wagon and eK Space manufactured and sold by Mitsubishi, and the Dayz and Dayz Roox supplied by Mitsubishi to Nissan under an original equipment manufacturer (OEM) agreement since June 2013.
According to IHS Automotive light-vehicle sales data, the eK Wagon and eK Space are key models for Mitsubishi and accounted for 45.3% of its total vehicle sales in Japan during 2015. For Nissan, the Dayz and Dayz Roox accounted for 25.6% of its total sales in Japan during the year. As a result, the sales of both the automakers declined during the month, with Mitsubishi's sales dropping 45% y/y and Nissan's sales slumping 51.2% y/y. The implications of this admission are as yet unknown. Last week, IHS Automotive issued estimates on the impact of these revelations on production, specifically of minivehicles in Japan.
Meanwhile, other brands such as Daihatsu and Suzuki are expected to benefit from the current scandal embroiling Mitsubishi's minivehicles in Japan. However, the extent of these benefits remains under question in the aftermath of Kumamoto earthquake with component supplies expected to remain under pressure for some months to come.
During the month, sales of mainstream vehicles in Japan returned to positive territory after witnessing declines in the previous two months, helped by a low base of comparison. However, for the year-to-date (YTD) period, the market shrank 1% y/y to more than 1.13 million units. For the full year 2015, the market shrank 4.2% y/y to just over 3.15 million units. The decline was mainly down to negative payback effects of the consumption tax rise in April 2014 from 5% to 8%, while macroeconomic factors such as higher inflation and weak wage growth reduced the momentum of consumer spending in the country.
Furthermore, minivehicle sales in the country declined for the 16th straight month in April. The segment is suffering from the negative impact of a 50% increase in minivehicle ownership tax introduced in April 2015. According to Yoshiaki Kawano, a Tokyo-based senior analyst with IHS, minivehicle demand is expected to remain weak for the next several months in light of the current market conditions.
Considering these factors, IHS Automotive forecasts only a mild recovery in Japanese light-vehicle sales (including minivehicles) in 2016, to nearly 4.96 million units, which would mark an increase of 0.4% y/y. Nevertheless, in the long term, the delay in further increasing consumption tax from the current 8% to 10% until April 2017 (from an originally scheduled October 2015) is expected to support the Japanese market, at least prior to April 2017.
About this article
The above article is from IHS Automotive Same-Day Analysis of automotive news, events and trends, and is a deliverable of the World Markets Automotive Service. The service averages thirty stories per day and also provides competitor and country intelligence. Get a free trial.