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Customer LoginsJapanese vehicle output rises 1.7% y/y during May, exports up 4.6% y/y
Japanese vehicle production grew by 1.7% year on year to 656,814 units in May, mainly helped by buoyant exports, especially to North America and Europe.
IHS Automotive Perspective
- Significance: Japanese vehicle production grew 1.7% year on year (y/y) to 656,814 units in May 2016, compared with 645,539 units in May 2015.
- Implications: There were mixed results in May, with Honda and Toyota the biggest gainers, but Mitsubishi and Suzuki the biggest losers.
- Outlook: According to IHS Automotive production data, Japanese vehicle output will grow by 1.4% y/y in 2016 to around 9.22 million vehicles. The effects of the Kyushu earthquake are dragging on and the time needed to recover lost production is extending as suppliers and OEMs struggle to find extra working days to make up for the lost time. According to our May forecast scenario, lost volumes will expand to 100,000 units in June without any recovery, and production will only start recovering from July.
Overall Japanese vehicle output, comprising passenger cars, trucks, and buses, reached 656,814 units during May, according to figures released by the Japan Automobile Manufacturers' Association (JAMA). This was a 1.7% year-on-year (y/y) increase from the 645,539 units produced in May 2015. As the largest category, passenger car output reached 554,070 units, up 2.8% y/y, followed by production of trucks and buses, which reached 92,514 units (down 3.2% y/y) and 10,230 units (down 5.3% y/y), respectively. Within the passenger car category, output of vehicles with an engine displacement in excess of 2.0 litres increased by 8.0% y/y to 359,866 units, while output of small vehicles grew 12.6% y/y to 115,705 units. Output of minivehicles decreased 24.0% y/y to 78,499 units.
Vehicle exports during the month totalled 302,682 units, up 4.6% y/y. Of this total, shipments to North America, the biggest destination for Japanese-made vehicles, increased by 7.0% y/y to 123,801 units. This was followed by Europe, to which exports grew 19.5% y/y to 50,372 units in May. Shipments to Asia were up 17.5% y/y (40,323 units) during the month, and it was followed by the Middle East with 31,139 units (down 17.8% y/y). Deliveries increased to Oceania (by 2.4% y/y to 25,894 units) and Latin America (by 6.6% y/y to 21,314 units), while they decreased to Africa by 31.1% y/y to 9,368 units.
Market leader Toyota's domestic production reached 241,926 units during the month, an increase of 12.4% y/y. Domestic output rose as the automaker took steps to make up for lost production following several supply-chain disruptions in recent months. Suzuki took second spot, producing 66,200 units, down 9.2% y/y, and it was followed by Nissan and Mazda, which produced 65,309 and 63,504 units, respectively. In fifth spot, Honda's output reached 56,652 units, up 29.4% y/y, followed by Fuji Heavy Industries (FHI) with 55,182 units (up 3.7% y/y) and Daihatsu with 46,999 units (up 4.8% y/y). Last on the list, Mitsubishi's production fell 39.8% y/y to 24,335 units. 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. Last week, Japan's Ministry of Land, Infrastructure, Transport, and Tourism (MLIT) gave Mitsubishi the go-ahead to resume sales of the four affected minivehicles in Japan, with revised fuel-economy figures. The automaker hopes to resume domestic production from July.
Outlook and implications
During May, Japanese vehicle output grew by 1.7% y/y mainly thanks to buoyant exports, especially to North America and Europe. This followed a 9.7% y/y decline in output to 643,901 units during April as twin earthquakes and Mitsubishi's fuel-economy scandal dented consumer demand, resulting in lower output volumes in the country. The country's output is also suffering because of stagnant domestic demand, particularly for minivehicles since 2015.
Toyota has lifted domestic output in a bid to make up for lost production following the supply-chain disruption of recent months. According to IHS Automotive forecasts, the aftermath of the Kyushu earthquake is dragging on and the time needed to recover lost production is extending as suppliers and OEMs struggle to find extra working days to make up for the lost time. According to our May forecast scenario, lost volumes will expand to 100,000 units in June without any recovery, and production will only start recovering from July. Commenting on Toyota's domestic output during May, IHS Automotive forecasting analyst Satomi Hamada says that the automaker's production is now set to be more than 13,000 units per day higher than levels last year. The automaker seems to have targeted higher production by adding overtime (around two hours per day) and extra working days at many plants (a maximum of two days per month) in a bid to recover lost volume. This drove the y/y growth figures reported yesterday (29 June) by the automaker. Meanwhile, production of Honda mini-commercial models produced at the Yachiyo plant has been stopped since 22 April because of component shortages at the Honda Kumamoto plant. We forecast that it will take until March 2017 for operations there to return to normal as the facilities at the Kumamoto plant were severely damaged.
According to IHS Automotive production data, Japanese vehicle output will grow in 2016 to around 9.22 million vehicles, up 1.4% y/y. By segment, production of passenger cars will rise by 1.7% y/y to nearly 7.9 million vehicles in 2016, while output of medium and heavy commercial vehicles (MHCVs) will grow 1.7% y/y to 341,772 units, whereas production of light commercial vehicles (LCVs) will decline by 1.1% y/y to 995,367 units.
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.