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Japan: Third Successive Monthly Decline for Auto Industry
Dec 17, 2008

Japan’s automobile sales recorded third consecutive monthly decline in October 2008, as demand from the domestic and US market is reducing due to the economic crisis.

According to the Japan Automobile Dealers’ Association (JADA), Japan’s vehicle sales in October 2008 declined continuously for the third successive month, reported RTTNews.

Automobile sales in October 2008 registered a steep decline of 13.1% on YOY basis against 5.3% fall in September 2008. Sales decline for the third month in a row in October. Earlier, in August 2008, a 14.9% decline was recorded in the sales. A total of 2,813,010 vehicles were sold during January-September 2008, 3% down from the same period previous year.

The major factor for the constant decline in the auto sales in Japan is the weak consumer confidence that has been shattered by the economic meltdown. Also, the uncertainty over the economic conditions has contained the purchasing power of consumers.

Falling sales and demand have forced automobile manufacturers to reduce their earning projections for this financial year because lack of credit and increasing unemployment are limiting consumer expenditure. Slow export growth and increase in against dollar have also decreased foreign sales.

Also, declining population and weakening consumer interest in investing in vehicles is hammering the vehicle demand in the country.

The Japanese government is in talks with the auto industry to explore the ways for boosting sales. The central bank has also slashed the interest rates. However, all efforts appear ineffective as the consumer confidence is not rebounding. The motor companies in Japan are announcing the October sales as the worst sales in nearly 20 years.

According to a Research Analyst at RNCOS, “Automobile sales in Japan declined to a record level due to the worsening financial crunch. It will be more difficult for vehicle demand to recover in Japan than in foreign markets as the country’s economy is in a critical phase. This crisis situation is expected to stay for some more time, so the good days are still out of sight for auto manufacturers and dealers in Japan.”

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