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Japan Automobile Industry Broke the Trend of Decline Last Month
Apr 07, 2008

The Japanese automobile industry grew modestly by 0.1% in the last month against the corresponding month last year as the personal incomes of people are mounting.

According to the Japan Automobile Dealers Association (JADA), sales of new vehicles, including cars, buses and trucks, increased 0.1% in February 2008 as compared to corresponding month last year, raising the figure to 322,613 vehicles, due to release of new models by leading manufacturers, as reported by Forbes on March 3, 2008.

Japan Automobile Association disclosed that the automobile industry grew significantly in February 2008 from 3.7% rise in January 2008. The biggest reason for growth in the automobile sector is increasing sale of Japanese cars which increased 1.6% to 286,278 in February this year.

Yoichi Amano, Chairman, JADA, said that introduction of new credit system and Tokyo Motor Show in October 2007 collectively contributed in increasing demand for new cars in the country. Beside, more fuel efficient cars’ demand is also rising to replace the older cars as crude oil prices are spiraling, as reported by Forbes.

Another reason for high growth in automobile industry is changing social status of Japanese people. They consider car as a symbol of social status and individual freedom. Apart from this, Japanese auto dealers, along with manufacturers, are widely promoting their products through advertisements to create curiosity among youth for buying new cars.

The changing transportation structure has also given rise to usage of more trucks in the country. Moreover, high employment rate and increasing wages of Japanese is jointly spurting the overall automobile sales in Japan.

JADA officials also forecasted moderate growth in the automobile sector this year and its recovery from last year’s plunge when the industry fell to the lowest point in last 35 years and fourth time in a row. However, the sales still greatly depend upon the volatile crude oil prices and economic trends to be seen in the country in future.

As per a Research Analyst at RNCOS, “Good time lies ahead for the Japanese automobile industry and it is still performing quite well though the global automobile industry is facing tough time due to escalating gasoline prices. It is a result of combined efforts of automobile dealers and manufacturers who are boosting sales by their strategic marketing plans and launch of new models.”

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