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Customer LoginsJapanese vehicle output declines 4% y/y during October, exports up 1.6% y/y
Japanese vehicle production declined 4% year on year in October, with six of the eight domestic automakers posting lower output.
IHS Markit Perspective
- Significance: Japanese vehicle production declined 4% year on year (y/y) to 781,165 units in October, compared with 813,216 units in the same month last year.
- Implications: Most of the domestic automakers posted lower output during the month, with Nissan and Daihatsu the biggest gainers.
- Outlook: In the year to date, production in the country is down 2.1% y/y at 7.58 million units, while exports are up 1% y/y at 3.78 million units. Automakers are witnessing soft demand in the domestic market, but there is substantial exposure to exports, which continue to offer tailwinds. According to IHS Automotive data, Japanese vehicle production will decline by 1.3% y/y to just over 8.96 million units this year.
Overall Japanese vehicle output, comprising passenger cars, trucks, and buses, reached 781,165 units during October, according to figures released by the Japan Automobile Manufacturers' Association (JAMA). This was a 4.0% year-on-year (y/y) decline from the 813,216 units produced in October 2015. Output of the largest category, passenger cars, reached 675,107 units, down 2.2% y/y. This was followed by production of trucks and buses, which reached 95,016 units (down 14.9% y/y) and 11,042 units (down 5.6% y/y), respectively. Within the passenger car category, output of vehicles with an engine displacement in excess of 2.0 litres edged up 0.7% y/y to 435,411 units, while output of small vehicles grew 2.0% y/y to 138,373 units. Output of minivehicles decreased 17.0% y/y to 101,323 units.
Vehicle exports during the month totalled 423,480 units, up 1.6% y/y. Of this total, shipments to North America, the biggest destination for Japanese-made vehicles, rose 15.0% y/y to 175,516 units. This was followed by Europe, exports to which grew 12.0% y/y to 80,287 units in October. Shipments to Asia were up 5.5% y/y to 52,788 units during the month, and it was followed by the Middle East with 44,409 units (down 31.7% y/y). Deliveries decreased to Oceania (by 0.4% y/y to 34,036 units), Central America (by 5.2% y/y to 18,847 units), South America (by 21.9% y/y to 7,862 units), and Africa (by 24.2% y/y to 9,165 units).
Market leader Toyota's domestic production fell 6.1% y/y to 260,426 units during October, marking a first decline in three months. Nissan took second spot, producing 95,490 units, up 36.6% y/y, and it was followed by Mazda and Honda, which produced 84,449 and 74,490 units, respectively. In fifth spot, Fuji Heavy Industries' (FHI) output reached 62,983 units, down 2.7% y/y, closely followed by Suzuki with 62,206 units (down 13.3% y/y) and Daihatsu with 59,206 units (up 29.7% y/y). Last on the list, Mitsubishi's production fell 13.4% y/y to 44,279 units, representing a sixth consecutive month of decline. The automaker suspended all domestic sales and production of four of its minivehicle models in April after admitting that it had failed to properly test 625,000 minivehicles sold in Japan for fuel efficiency. The number of affected models grew to 12 after the automaker was found to have overstated mileage data for eight more models in August. After receiving approval from the Ministry of Land, Infrastructure, Transport, and Tourism (MLIT), the automaker first resumed sales of the four affected minicars in July and then of the other eight models in October.
Outlook and implications
Japanese production slipped into negative territory last month after posting a 1.4% y/y increase in September, when OEMs added inventory for what is traditionally one of the most favourable sales months in Japan. In October, despite marginally lower output, exports remained in positive territory. Nevertheless, the continued weakness of domestic demand has been offsetting these gains in exports. Compared with combined domestic mainstream and minivehicle sales of 378,741 units in October, domestic output stood at 781,165 vehicles, underlining the huge role exports still play for Japanese vehicle output. On the whole, vehicle production in Japan has posted mixed results throughout much of 2016 as Japan's automakers are witnessing soft demand in the domestic market following the consumption tax increase in April 2014 and the minicar tax rise in April 2015.
The well-established trend of Toyota leading the way remained intact in October, although its output declined 6.1% y/y during the month. Nissan and Daihatsu were the only two players to register higher output during the month. In line with the decline in industry output in October, year-to-date (YTD) production in the country is also down, falling 2.1% y/y to 7.58 million units. During the first 10 months of this year, export volumes grew 1.0% y/y to 3.78 million units.
IHS Automotive has trimmed its 2016 vehicle production forecast for Japan following the government's decision to defer the scheduled increase in value-added tax (VAT), which had been expected to keep sales firm this year. We now expect Japanese vehicle production to decline by 1.3% y/y to just over 8.96 million units this year.
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.