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Customer LoginsSame-Day Analysis: Japanese vehicle output slides 6.9% y/y in February, exports up 1% y/y
Overall production of passenger cars, trucks and buses declined 6.9% y/y during February, partly weighed down by Toyota's nationwide output shutdown
IHS Automotive Perspective
- Significance: Japanese automobile production in February declined 6.9% y/y to 766,804 units, compared with 823,864 units in February 2015.
- Implications: February posted mixed results with Suzuki, Daihatsu and Toyota among the biggest losers, while Honda and Mazda emerged as the biggest gainers.
- Outlook: According to IHS Automotive vehicle production data, Japanese output will edge up in 2016 to over 9.29 million units, up 2.1% y/y, due to the waning negative effect of tax increases in 2014 and 2015 and an improvement in consumer sentiment. However, thanks to demand in the US and Western Europe, Japanese OEMs are likely to increase their exports in 2016, even as some automakers continue to switch production for some models overseas.
According to the figures released by the Japan Automobile Manufacturers' Association (JAMA), overall Japanese vehicle output, comprising passenger cars, trucks and buses, reached 766,804 units during February. This is a 6.9% year-on-year (y/y) decline from the 823,864 units sold in February 2015. As the largest category, passenger car output reached 651,663 units, down 6.7% y/y, followed by truck and buses which reached 105,578 units (down 7.3% y/y) and 9,563 units (down 16.9% y/y), respectively. Within the passenger car category, output of vehicles with an engine displacement in excess of 2.0 litres decreased by 1.3% y/y to 393,694 units, while there was a steeper decline of 8.3% y/y in production of small vehicles to 127,330 units. Similarly, output of minicars shrunk 18.2% y/y to 130,639 units.
Vehicle exports during the month totalled 369,410 vehicles, edging up 1% y/y. Of the total, shipments to North America, the biggest destination for Japanese-made vehicles, increased 12% y/y to reach 149,350 units, followed by Europe where exports declined 2.1% y/y to 61,836 units. Shipments to the Middle East declined 19.1% y/y (45,761 units) during the month, followed by Asia with 42,306 units (up 9.6% y/y). Deliveries to Latin America, Africa and Others decreased during the month by 9.1%, 13% and 49.9%, respectively, while it increased for Oceania by 1.6% y/y.
Market leader Toyota's domestic production reached 223,850 units during the month, declining 18.8% y/y. This can be partly attributed to the temporary production halt announced by the automaker during the month at its domestic plants across the country. Following an explosion at a steel plant operated by its affiliate, Aichi Steel, Toyota stopped production between 8 and 13 February. It was the first decrease in seven months for the automaker. Mazda took the second spot and produced 86,721 vehicles, up 11.7% y/y, thanks to greater output of passenger cars. Mazda was followed by Nissan and Honda, which produced 83,835 units and 75,348 units, respectively during the month. In fifth spot, Daihatsu's domestic production totalled 64,009 units with a 13.3 % y/y decrease, followed by Suzuki, Mitsubishi and Fuji Heavy, manufacturer of Subaru-brand vehicles.
Outlook and implication
February was yet another month of declining production in Japan as a result of stagnant domestic demand, particularly for minicars. Japanese auto output remains in negative territory so far during calendar year 2015, mirroring the depressed state of the Japanese sales market and exports failed to underpin output. However, the rate of decline has moderated over recent months indicating the waning negative effect of the consumption-tax increase in April 2014 and the minicar tax increase in April 2015, and an improvement in consumer sentiment. In terms of vehicle demand, the overall vehicle sales in Japan (including minivehicles) totalled 451,330 units, down 6.4% y/y during February.
According to IHS Automotive production data, Japanese output will edge up in 2016 to over 9.29 million units, up 2.1% y/y, following two years of weak demand. Furthermore, the delay in another increase in consumption tax to 10% from the current 8% until April 2017 (originally targeted for October 2015) is forecast to support the Japanese market between the fourth quarter of 2016 and the first quarter of 2017. By segment, passenger car production will rise 2.8% y/y to 7.97 million units in 2016, MHCVs (medium to heavy commercial vehicles) will be up 0.5% y/y to 342,022 units whereas LCVs (light commercial vehicles) will decline by 2.6% y/y to 980,764 units. Passenger car output growth will be likely on account of further export increases from Japan as some OEMs switch production for some models to Japan from overseas. On the other hand, LCV segment will witness settling down of the new model effect, launched between late 2013 to early 2015, as well as Japan's demographic changes, whereby users of LCVs are gradually decreasing due to the ageing population.
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.