As expected and predicted, October new car sales in Japan were a disaster. Japan’s domestic sales of new cars, trucks and buses declined 26.7 percent from a year earlier, down for the second straight month. Japan is going through a big withdrawal after the Japanese government withdrew incentives.
Only 193,258 vehicles changed hands in October, the Japan Automobile Dealers Association said today to The Nikkei [sub]. The figures do not include mini vehicles, which are reported separately.
Japan is caught in a double whammy. Its domestic sales will suffer for a while. Other that the cash for clunkers programs, the Japanese program had a strong pull-forward effect. Also, the Japanese auto industry suffers from a strong yen, which makes cars exported from Japan more expensive or less profitable. One dollar bought only 80.4 yen today.
As far as individual companies go:
Toyota down 24.2 percent.
Honda down 29.9 percent.
Nissan lost 30.6 percent.
Correct me if I am wrong, but I suspect that one of Japan’s colossus neighbors has been buying yen with their surplus dollars – which makes Tokyo’s attempt to manipulate the Yen’s exchange rate versus the USD ineffective.
The JDM for cars may rebound back to normal within a year or two, but that won’t help when they repatriate their North American earnings back to the home isles – especially if the Yen starts trading in the 70’s versus the Dollar range.
Let me add that exchange rates are volatile and with one tempest in a tea pot panic concerning Asia, the Yen could lose ground against the dollar tomorrow.
naku?
jupp. As in 泣く
The demographics are working against them. Japan is aging fast. The JDM isn’t going to expand anytime soon … if ever. This is going to be the biggest hangover the car companies have ever seen and the export market becomes absolutely vital.
I wonder how long it will be before the titans start buying up the competition abroad while they still have the cash.