New car sales in Japan have dropped for the fifth straight year, to their lowest level since 1975. Thomson Financial (via Forbes) cites a Japan Automobile Dealers Association study which points to high gas prices as the prime culprit in recent sales losses. Even Japan's 660cc kei car category is feeling the hurt, dropping for the twelfth straight month. Japanese automakers have been fighting sliding sales aggressively, rolling out new models and pouring money into marketing gimmicks like Toyota's Auto Mall . But there's nowhere to run in such a saturated market. Honda, Nissan, Subaru and Suzuki posted modest sales gains in March, while Lexus dropped nearly 18 percent, Isuzu dropped 12 percent, and Mitsubishi lost nearly 14 percent of sales. The biggest losers? Truck manufacturers, who saw between 12 and 27 percent losses. If economic misery loves company, America and Japan could be best of friends.
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One of the big reasons for lagging Japanese car sales is a major shift in societal issues regarding car purchases. For decades, there was huge social pressure to buy a new car every two to three years. Japanese were very vulnerable to this (“it’s for the good of industry!”). Salesmen would come to their regular customers’ houses and hound them mercilessly (how would you like your Chevy dealer knocking on your door?).
This has evaporated in the past ten years or so, and so have new car sales. People are keeping cars longer, or realizing that they actually never drove those like-new garage-queens.
On a GDP per head basis, which affects purchasing power, Japan’s economy is doing fairly well.
I understand that there is also a literal cultural change in the generations now at car buying age.
While their parents looked at owning a car (instead of a bicycle or scooter) as “stepping up” the current generation has a tendency to skip that idea and use mass transit, go on vacations to Banff or Hawaii, get more gizmos for their (very small) houses, etc.
The onerous costs of ownership (being forced to scrap cars at 10 years of age, high fuel taxes, high parking fees, the near impossibility of parking at all, and sheer impracticality of owning even a kei car in such a crowded environment) is also taking its toll.
Thus, it isn’t a damning condemnation or sign of failure of the Japanese automobile companies to see sales waning in Japan. That would be the case if the Japanese were buying American F150’s and Dodge Ram Cummins Diesels (tongue in cheek).
For decades, there was huge social pressure to buy a new car every two to three years.
Kind of reminds me of the “get everyone into a house” attitude in the U.S. for the past ten years. That didn’t work out well for the market, either.
Get used to falling car sales in Japan, primarily because there are fewer and fewer of the main resource needed to fuel new car sales, namely, Japanese. Their birthrate is way below replacement rate and I believe they have actually hit the stage of a declining population. Generally, older people buy fewer cars and Japan is getting older in Spades. Expect to see similar trends in Europe in the next couple of decades. Japan also is especially hard hit by birthrate declines because they have almost zero immigration.
Hard to sell more cars to fewer people, especially fewer people of greater age.
being forced to scrap cars at 10 years of age, high fuel taxes, high parking fees, the near impossibility of parking at all, and sheer impracticality of owning even a kei car in such a crowded environment
I’ve never understood why so many people in Tokyo, Hong Kong or other super-dense, super-expensive, excellent-public-transport Asian cities even bother to own cars. I guess it’s a status thing; interesting to note that cultural trends may be starting to work against this.
Of course, I’m pretty sure that by tomorrow, TTAC will have an article about the blood on the ground relating to the DISASTEROUS March sales of US vehicles. GM down, Ford down, even Toyota is down. Honda was slightly down overall.
I’ll stick my neck out and guess that Chrysler, when they announce, will be down 25% or more.
I think GM was down almost 17%, Ford down 14%.
Interestingly, Toyota Yaris was up over 80% and Honda Fit was up something like 78%, Toyota Prius sales were up too.
There’s a big movement to small cars and away from Stupid Utility Vehicles. At long last.
Gm was down only 13%. Compared with sales last year. But, the Lambda was up to 14,000 units over the 12,000 from last month.
GMC Sierra was actually up 4%.
So no “Ribbons of Shame.” Unless you count the mistruths.
“Interestingly, Toyota Yaris was up over 80% and Honda Fit was up something like 78%, Toyota Prius sales were up too. ”
Interesting? Only if you’re interested in buying one for each foot.
gawdodirt :
April 1st, 2008 at 4:17 pm
Gm was down only 13%. Compared with sales last year
Here is the raw data from GM (PDF). Total disaster. No need for mistruths, the truth is bad enough.
http://media.corporate-ir.net/media_files/IROL/84/84530/sales_production/GM_Mar2008Deliveries.pdf
It’s interesting to me that the Aveo and Cobalt are down 45 and 26 percent, respectively; yet, the Vibe is up 29 percent (all figures March volume changes). People just don’t associate Chevy with desirable economy car.
Chevy light and heavy truck sales figures indicate a bloodbath in March…
Escalade triplets: Eek! Escalade down 25, ESV down 25, EXT down 41; and SRX down 20 percent over Feb.
The Vibe is up, because it is new, because the vehicle it is based on, the Toyota Matrix, is new, because the vehicle it is based on, the Toyota Corolla, is new (whew). The Aveo and Cobalt are old, so they are down.
And, yeah, there was a total bloodbath in full-sized pickups. Both Ford and Chevy were down by about a quarter, although Toyota was up (due to the fact that the new Tundra was just coming out last March), and the GMC Sierra was basically flat (for no reason I can figure out). Finding sales figures for privately owned Chrysler (for the Dodge Ram) is a pain in the butt and I haven’t bothered.
I prefer month on month numbers pure, rather than daily sales because – as someone mentioned on the other stream – a lot of dealers sell cars EVERY DAY OF THE MONTH. So it seems less honest to parse the numbers out by “selling days” (which I’m presuming means “everything but Sunday”) when a lot of dealers sell on Sunday, i.e. every day of the month!
But I grant you, no matter how the numbers are parsed, sliced, diced and their entrails examined, March was not a great month for anyone. Maybe a “good month” relatively speaking for Hyundai, Nissan, Volkswagen and Honda, and quality small cars in general. (Of course, I can’t work out how “quality small cars” and “Volkswagen” can be in the same category, personally).
ScottGSO is right. At least the US car market will recover sooner or later, that’s a certainty. But it’s equally certain that the Japanese market will not: their decline will continue as far as the eye can see.