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Japan Experienced 6.1% Decline in New Vehicle Sales in May 2008
Jun 24, 2008

The sales of new cars, buses and trucks in Japan slumped 6.1% in May 2008 due to rising gasoline prices, soaring inflation and aged population.

As per the data released by Japan Automobile Dealers Association (JADA), the automobile sales, including cars, buses and trucks, fell by 6.1% last month (May 2008) for the first time in last two months (March-April 2008), as reported by
HEMSCOTT.

In terms of number, the sales of new cars, trucks and buses declined to 221,377 Units against April 2008. Car sales slumped by 4.4% to 190,695 Units and trucks sales slipped by 16.0% to 2,659 Units. In addition, the sales of mini vehicles in the domestic market fell by 2.8% to 139,147 Units.

A
s the gasoline prices are spiraling at a fast pace worldwide, consumer spending in the country has been hit hard, directly impacting the automobile industry. The Japanese government also reinstated the gasoline surcharge at the beginning of May 2008. Hence, high gasoline prices desisted transportation companies from adding new trucks to their current fleet.

Another important factor that bumped automobile sales in the country is soaring inflation that raised prices of food items and other essential commodities. Consequently, people shifted their spending from luxuries to essential items and the automobile industry in Japan experienced slowdown during May 2008. Moreover, the stagnant wages in the country hit the vehicle sales because customers were thinking many times whether to buy new vehicles or not due to rising cost of traveling.

Apart from this, the country’s ageing population and low birth rate negatively affected the Japanese automobile industry. Japan has low share of young people who willingly spend on vehicles for their standard and lifestyle.

However, the auto manufacturers are coming up with new models to catch the attention of people and to enlarge the shrinking market share of automobile industry in the country. Manufacturers have initiated new and flexible loan schemes to reduce burden from the customers.

According to a Research Analyst at
RNCOS, “Due to spiraling gasoline prices and economic uncertainties, the number of people wishing to have own cars is continuously decreasing in Japan. Hence, auto manufacturers need to follow policies that boost the demand for car in the country by improving the service standard and making products attractive and fuel efficient.”

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