Wednesday, March 25, 2009

Plunging Auto Sales

Toyota Motor said Tuesday that its global production had plunged by nearly half in February from a year earlier, while Honda and Nissan reported similarly grim figures highlighting the troubles facing Japanese automakers.

Separately, the Japan Automobile Manufacturers Association said auto sales in Japan for the fiscal year through March 2010 were expected to have dropped 8 percent from the previous year to what would be a 32-year low of 4.297 million vehicles.

The last time domestic sales were lower was in fiscal 1977, when 4.23 million vehicles were sold, it said.

"With the Japanese economy weakening and the outlook for employment looking very uncertain, consumers are in no mood to buy a car," Satoshi Aoki, chairman of the manufacturers' association, said at a news conference.

Demand for passenger cars in Japan has fallen for the past three years, largely because of a population shift to cities, which are well-served by public transportation. The global economic crisis has exacerbated that trend, as car owners in Japan wait longer to replace aging vehicles.

The manufacturers' group is counting on a bill, expected to pass in the coming week with the government's broader budget plan, that would give incentives to buyers of low-emission cars to help add about 310,000 vehicles in sales in the 2009-10 business year.

Toyota's production figures — which include a truck maker, Hino Motors, and Daihatsu Motor, which makes small cars — showed global production for February had tumbled 49.6 percent to 434,179 vehicles. Toyota's production in Japan for the month declined 56.4 percent from a year earlier, to 207,743 vehicles.

Honda Motor's global production in February declined 42.7 percent from the same month a year ago, to 190,680 vehicles.

Its Japanese output fell 48.4 percent, to 54,748 vehicles.

Monthly worldwide production for Nissan Motor in February declined 51.3 percent, to 156,864 vehicles, while its production in Japan plunged 68.8 percent. Nissan is allied with Renault of France.

Mazda Motor's global production fell 54.6 percent, to 57,642 vehicles for the month, while Mitsubishi Motors' output dropped 65 percent, to 45,048 vehicles, from the previous year.

While praising the government's stimulus plan, Mr. Aoki said more must be done, pointing to Germany's successful car-scrapping incentive program as an example of something that could be implemented in Japan.

"We need to prop up demand further on a broader basis," he said. "Germany's system could be one guide, and we want to seek help from the government."

The German government is offering car owners €2,500, or $3,400, if they turn in vehicles that are more than nine years old and switch to new models with lower emissions. That helped the country's new-car sales jump 21 percent in February from a year earlier, for the first rise in half a year.

Global automakers' financial troubles are claiming another victim: international auto shows. The Japanese manufacturers' group said Tuesday it would shorten the Tokyo Motor Show this year by 4 days to 13 days to help save money for those participating.

Announcing the list of participants, the group said Japan's four truck makers, along with most other foreign carmakers, had pulled out of the event this year. One of the world's five major international auto shows, it was scheduled to open Oct. 23.

Japan's eight domestic passenger-car makers will be joined by Ferrari, Hyundai Motor, Lotus, Maserati, Porsche and Alpina in that category.

Volkswagen, Daimler and BMW, Japan's top import brands, will not attend.

Source - International Herald Tribune


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