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No Relief for Domestic Auto Sales in Japan
Feb 06, 2008

Declining population and rising fuel prices are among the main reasons for the continuing decline in the sales of new vehicles in Japan’s domestic market despite efforts by automakers to boost sales.

According to news reported by
Xinhuanet, the Japan Automobile Dealers Association that domestic sales of new vehicles in Japan fell for the fourth consecutive year since 2003 to 3,433,829 units in 2007. The year on year decline was 7.6%, a new record since 1972.

For 2008, the Japan Automobile Manufacturers Association (JAMA) estimates domestic sales to fall to approximately 1.88 Million units. One of the reasons for this slump could be non-car owning males in their early 20s whose percentage has gone up from 24.9% to 32.1%.

Industry experts reveal that the government measures for reducing the population has resulted in a decline in population in the country. The modern youth is also displaying an aversion to automobiles and greater interest in mobile devices with innovative technologies.

New car sales in the country have also been hit by the never ending increase in gasoline prices. Apprehension over after-effects, especially soaring fuel prices, is leading to a preference for staying at home as opposed to purchasing new vehicles.

Also contributing significantly to the slump in Japan’s auto industry is the slowdown in the housing market and low income which have casted an adverse effect on the demand for automobiles in Japan. The country is also suffering from declining employment that is increasing the difficulty for people to purchase new vehicles.

According to the findings, spontaneity is lacking in Japan’s auto market to respond to attempts made by some carmakers of the country to reignite local demand through increased offerings in new models.

The slump in Japanese auto market has hurt Japan’s largest automaker, Toyota Motor Corp. also that despite the introduction of nine models since May 2007 estimated a fall of 65% in domestic sales in 2007.

RNCOS Research Analyst said, “Japan’s automobile industry is reaching maturity. A large chunk of the population is looking away from the auto sector. The need, therefore, is for Japanese automakers to come up with technology-intensive new vehicles, given the Japanese penchant for technology. A shift of focus is also recommended for automakers to foreign countries, particularly the developing countries like India, Pakistan and Sri Lanka where automobile demand continues to rise seamlessly.”

Related Market Research Reports:
China Automobile Industry Forecast (2006-2010)
Asian Automotive Industry Outlook (2007-2011)
Indian Automobile Sector - A Booming Market