Japanese new-vehicle sales were positive year on year in February as domestic demand picked up owing to new models launches.
IHS Markit Perspective:
- Significance: Japanese sales of new vehicles, excluding minivehicles, totalled 312,035 units during February, marking a 13.4% year-on-year (y/y) increase. Minivehicle sales slipped 2% y/y to 172,689 units during the month.
- Implications: Japanese sales of mainstream registered vehicles grew for a seventh straight month in February, while minivehicle sales posted negative results for a second consecutive month, after briefly posting growth in December 2016.
- Outlook: IHS Markit currently forecasts that light-vehicle sales in Japan will total more than 4.91 million units during 2017, up 1.4% y/y, helped by a gradual recovery in minivehicle sales and the continuation of "eco-car" tax benefits for another two years.
Japanese sales of new vehicles, excluding minivehicles, totalled 312,035 units during February, marking a 13.4% year-on-year (y/y) increase, according to data released today (1 March) by the Japan Automobile Dealers' Association (JADA). Of this total, sales of passenger and compact cars grew 14.4% y/y to 273,860 units, truck sales edged up 6.9% y/y to 36,765 units, while bus sales were up 3.5% y/y to 1,410 units. Sales in the year to date (YTD) now stands at 570,120 units, reflecting an increase of 11.2% y/y. Within the mainstream vehicle market, Toyota reported a surge of 29.7% y/y in sales during February, to 145,255 units. It was followed by Nissan, which sold 46,589 units, up 12.8% y/y.
Honda followed with a 5.9% y/y drop in sales to 34,276 units. Mazda came fourth with sales of 15,925 units, down 10.9% y/y. Fuji Heavy Industries (FHI), the producer of Subaru-brand vehicles, followed with sales of 13,218 units, a 13.4% y/y gain. Sixth and seventh positions were occupied by Suzuki and Isuzu with sales of 9,599 (up 9.4% y/y) and 6,824 units (up 15.7% y/y), respectively. Hino witnessed growth of 6.9% y/y in mainstream new-vehicle sales to 5,284 units. In the last two places, both Lexus and Mitsubishi reported lower sales: 3,672 (down 12.3% y/y) and 2,963 units (down 41.6% y/y), respectively. In February, 27,018 vehicles were imported into Japan, down 1.1% y/y.
Sales of minivehicles, categorised as vehicles with an engine capacity of up to 660 cc, dipped 2% y/y in February to 172,689 units, according to the Japan Mini Vehicles Association. During the month, Daihatsu became the leading player in the segment by posting sales of 54,017 units, down 7.9% y/y. Daihatsu was closely followed by Suzuki, which posted sales of 53,284 units, up 10.3% y/y. In third place, Honda's sales reached 32,478 units, down 0.3% y/y. Nissan occupied fourth position, its sales slumping 11.7% y/y to 19,057 units, followed by Mitsubishi with 4,713 units (down 18.7% y/y). Mazda and FHI were next with 3,582 units (down 4% y/y) and 3,071 units (down 2% y/y), respectively. Last on the list was Toyota, which sold 2,484 units during the month, rising 2.7% y/y.
Outlook and implications
February marked as the seventh consecutive month of increase for the new-vehicle sales in Japan. Sales surged 8.6% y/y during January and 10.8% y/y in December. Growth during the month can be largely attributed to positive demand for new models such as the Toyota C-HR and Roomy, Nissan Serena and Note, and Suzuki Swift .
During February, the minivehicle segment posted negative results for a second month in row, after briefly posting a 1.7% y/y rise in December 2016. Nevertheless, the rate of decline has slowed considerably as compared to previous year as the long downward trend bottoms out. Sales during the month were partly helped by new model launches such as Toyota's Roomy and Tank, according to Yoshiaki Kawano, a Tokyo-based senior analyst with IHS Markit. The segment is already under pressure because of the negative effect from a 50% increase in minivehicle-ownership tax introduced in April 2015, faced an additional challenges in 2016 in the form of a mileage scandal involving Mitsubishi. The automaker suspended production and sales of four of its minivehicles, sold only in Japan, after the models were found to have inflated mileage ratings. In August, the automaker was found to have overstated fuel-consumption data for eight more models including the Pajero, Outlander, and RVR. Sales of models affected by the first mileage-data scandal resumed on 1 July 2016, while sales of models involved in the second revelation restarted on 1 October 2016 with corrected mileage data. As a result, Mitsubishi's sales witnessed double-digit percentage declines during most of 2016 and recorded an 18.7% y/y decrease last month.
IHS Markit currently forecasts that light-vehicle sales in Japan will total more than 4.91 million units during 2017, up 1.4% y/y. Of this total, passenger-car sales, which account for nearly 85% of the overall market, are expected to grow by 2.5% y/y to 4.21 million units. Sales of light commercial vehicles (LCVs) are expected to fall 5% y/y to 704,097 units. Overall, we expect the growth this year to be partly fuelled by the continuation of "eco-car" tax benefits. In a bid to promote and support eco-car sales, the government extended the current eco-car tax breaks for another two years from April 2017 to April 2019, accompanied by more stringent fuel-economy standards.
About this article
The above article is from IHS Automotive Same-Day Analysis of automotive news, events and trends, and is a deliverable of the World Markets Automotive Service. The service averages thirty stories per day and also provides competitor and country intelligence. Get a free trial.