Vehicle sales in Japan fell 14.9% year-on-year in August, led by a 25% decline in the commercial vehicle category, and Honda was the only automaker to make any meaningful gains during the month. The minivehicle segment was relatively flat by comparison, although still stagnant.

Base effects made some contribution as sales in August 2007 were boosted following an earthquake that disrupted production the previous month, while there were also two additional sales days during the month. However, the downward trend is mainly due to the general weakness in the market.

The minivehicle segment should improve before the end of the year as new vehicles enter the market, but it is likely that the overall vehicle market will continue to decline and that sales will be flat next year, with very little in the way of significant recovery in the long term.

The Japanese Automobile Dealers Association (JADA) has announced sales data for the country's vehicle market in August, showing a far larger downturn than in earlier months. The overall number of vehicles sold during the month was 193,902 units, down by around 14.9% when compared with the same period a year earlier, resulting in year-to-date (YTD) sales of 2.27 million units, a deficit of 1.5% year-on-year (y/y). By vehicle type, passenger car sales declined 12.8% y/y to 166,153 units in August, but growth remained positive in the YTD at 0.7% y/y, equating to 1.98 million units. Meanwhile, commercial vehicle sales fell at an even faster rate than in earlier months, by 25.6% y/y to 26,683 units, leaving YTD sales down 15.0% y/y at 273,802 units.

Reflecting the fall in the overall market, declines were the order of the day for many of the domestic automakers in August. Partly as a result of its sheer size, Toyota bore the brunt of the decline, its overall group sales sinking by 18.9% y/y to 84,503 units; the Toyota brand recorded an 18.4% y/y fall to 83,315 and its luxury brand, Lexus, suffered an even greater decline of 44.4% y/y to 1,188 units.

Nissan remained in second place, but its sales fell at a similar rate, although thanks to stronger demand earlier in the year its YTD sales remained in positive territory. By contrast, Honda was one of the only automakers to register growth in August, its sales increasing by 16.0% y/y to 27,448 units, which lifted its YTD sales 13.8% to 291,323 units. It was joined by smaller automaker Suzuki, which made a 1.3% y/y gain to 5,522 units, adding to its YTD growth. Mitsubishi Motors endured the worst percentage decline of all the local brands with a fall of 34.0% y/y, meaning that its YTD sales are now down 12.0% y/y.

By comparison, data published by the Japan Mini Vehicle Association show that minivehicle sales saw a far less dramatic decline in August than the larger-sized classes. The total number of vehicles sold in the month fell just 2.8% y/y to 116,189 units, a slower rate of decline than the average for the eight months since the start of 2008, during which period sales fell 3.2% y/y to 1.28 million units.

This was a result of the slump in the number of commercial vehicles sold in this segment, which declined by 16.7% y/y to 27,047 units, adding to the falls seen in earlier months; YTD sales now stand at 298,858 units, down 5.5% y/y. However, passenger car sales in this segment rose by 2.4% y/y to 89,142 units, although this was unable to lift the sector into positive territory in the YTD as sales are still down by 2.5% y/y at 983,897 units. Daihatsu remained the leading automaker in this category thanks to growth of 5.3% y/y to 38,679 units, just surpassing Suzuki, which sold 38,306 units. Whereas others in the market also reported increases of varying degrees, Honda, Mitsubishi, and Fuji Heavy all saw falls fall, by 11.4% y/y, 30.2% y/y, and 15.7% y/y, respectively.

Courtesy: Global Insight

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Posted by Naresh Koshti on 2 September, 2008 8:15:04 AM IST #