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Japan - Imported Vehicle Sales Slumped 23.8% in May 2008
Aug 07, 2008

Sales of imported vehicles plunged by 23.8% in May 2008 due to hike in tax rate, rising fuel and food prices, and high competition from domestically manufactured vehicles.

According to the Japan Automobile Importers Association (JAIA), sales of imported vehicles declined 23.8% to 15,811 Units in Japan during May 2008 from the same month last year, as reported by
Japan’s Corporate News.

JAIA disclosed that sales of imported vehicles plunged by 20.30% to 13,953 Units whereas the passenger car sales fell by 29.80% to 14,458 Units. Besides, Volkswagen, the best selling brand in imported vehicle segment, experienced decline of 10.0% to 3,314 Units, while BMW was at the second place with decline of 31.7% to 2,485 Units. Mercedes-Benz was at third place with fall of 21.6% to 2,328 Units.

The fall in imported vehicle sales was primarily due to a hike in tax rate from 3% to 5% on purchase price on May 1, 2008. Besides, the sales of imported cars increased in April 2008 owing to cut in automobile acquisition tax on April 1 that also gave some after effects, which pushed the imported vehicle sales back in May 2008. Thus, the Japanese people refrained from buying the imported cars and gave preference to the domestic cars.

Moreover, increasing food and fuel prices also forced people not to spend in the auto market, as they were feeling uneasy to buy imported vehicles on account of paying more money for essential commodities. Many consumers in the country were also giving importance to the second-hand cars or low-value cars due to financial comfort.

Furthermore, the sales of Japanese-brand vehicles are also growing as new models are being launched in the market. As a result, sales of imported cars declined in the country. Thus, people selected new models of domestically manufactured cars in place of imported cars.

According to a Research Analyst at
RNCOS, “The sales of imported vehicles declined in Japan due to unfavorable business conditions, thus impacting the overall automobile industry. Under such conditions, aggressive promotion of imported cars can provide some boost to the auto market. Also, the foreign car manufacturers can push up the sales by introducing fuel-efficient and competitive models in the market.”

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