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Sales of imported vehicles rise in Japan during H1, VW to introduce diesel variant of Passat




Imported vehicle sales grew 2% y/y in Japan during the first six months of 2017, driven by demand for clean diesel variants offered by premium and foreign brands. Meanwhile, Volkswagen will add a diesel variant of the Passat in Japan in the next few months.

IHS Markit perspective

  • Significance: The Japan Automobile Importers' Association (JAIA) has released imported vehicle sales figures for the month of June and the first half of 2017. During June, sales of new imported vehicles edged up 0.9% year on year (y/y) to 35,528 units in Japan. During the first six months of 2017, sale of imported vehicles grew 2% y/y to 173,834 units in Japan, from 170,366 units in the same period the previous year.
  • Implications: During the first half of 2017, sales of imported vehicles surged mainly on the back of foreign-brand imported vehicles while Japanese-brand imports slumped. During the period, customers continued to prefer clean diesel variants offered by other premium and foreign brands.
  • Outlook: According to IHS Markit light-vehicle data, sales of imported vehicles in Japan will edge up 0.4% y/y to 337,180 units in full-year 2017. Imported sales will be led by brands such as Mercedes-Benz, VW, BMW, Audi, and Mini, which will together account for 66% of the total sales during the year.

The Japan Automobile Importers' Association (JAIA) has released imported vehicle sales figures for the month of June and the first half of 2017. During June, sales of new imported vehicles edged up 0.9% year on year (y/y) to 35,528 units in Japan. Sales of foreign-brand imported vehicles rose 3.6% y/y to 32,142 units but sales of Japanese-brand imported vehicles slumped 18.9% y/y to 3,386 units. By brand, Mercedes-Benz led the sales volume with a share of 18.5% of the imported market, its sales up 3.5% y/y to 6,594 units. BMW followed with a market share of 16.8% and sales of 5,970 units (up 5.6% y/y). In third spot, Volkswagen (VW) sold 5,238 units (up 2.2% y/y) with a share of 14.7%. Among the key Japanese brands, Toyota sold 1,504 imported units (up 6.9% y/y), followed by Nissan with 1,217 units (down 9.3% y/y).

During the first six months of 2017, sales of imported vehicles grew 2% y/y to 173,834 units in Japan, from 170,366 units in the same period the previous year. Of this total, sales of foreign-brand imported vehicles witnessed growth of 3.8% y/y to 150,997 units, while sales of Japanese-brand imported vehicles declined 8.2% y/y to 22,837 units. The sales were led by the Mercedes-Benz, VW, and BMW brands in the top three slots and accounting for market shares of 18.85, 14.7% and 14.6%, respectively. Imports grew 1.4% y/y to 32,699 units for Mercedes-Benz, 2.1% y/y to 25,596 units for VW, and 3.2% y/y to 25,429 units for BMW during the first six months of the year. Among the Japanese brands, Nissan's imported vehicle sales grew 8.5% y/y to 9,958 units and Toyota's imported vehicle sales grew 3.2% y/y to 8,115 units.

Separately, VW will add a diesel variant of the Passat in Japan in the next few months, according to a report by the Japan Automotive Daily. The report cited VW board member Jurgen Stuckmann, who added that the diesel engine car for Japan is likely to be introduced before the Tokyo Motor Show at the end of October. Furthermore, the company is also planning to introduce diesel variants of more models in Japan.

Outlook and implications

Last year, Japan's new imported car market registered its first year of growth after posting declines for two consecutive years. In the overall Japanese new vehicle market last year, sales of mainstream passenger vehicles rose 3% y/y to 3.24 million units and minivehicle sales slumped 9% y/y to 1.72 million units. The growth came as the market was partly helped by wealthy consumers in the first half of the year who spent more on European premium brands thanks to positive wealth effects resulting from Japan's 'Abenomics' economic policies.

During the first six months of 2017, sales of imported vehicles surged mainly on the back of foreign-brand imported vehicles, while Japanese-brand import sales slumped. During the period, customers continued to prefer clean diesel variants offered by other premium and foreign brands, according to Yoshiaki Kawano, a Tokyo-based senior analyst with IHS Markit. Japanese brand imports did not offer alternative-powertrain variants to attract customers in Japan, resulting in a decline. Kawano said, "Although Japan is still 95% gasoline based, the clean diesel (for passenger car use) has gained popularity again in recent years, due to the shift of better consumer perception (in late 90s and 80s Japan had lots of diesel powered vehicles but some cities banned them due to environmental concerns). Availability of eco-car tax breaks with some clean diesel subsidy has also encouraged European OEMs to launch diesel variants in Japan in recent years… The list price in general for clean diesel vehicles are relatively expensive, but taking into account the lower diesel fuel prices and incentives, consumers are also buying diesel variants." Recently launched diesel model variants in Japan include the BMW 5-Series, 3-Series GT, Mercedes E-Class, GLC Coupe, Citroën DS5, and Maserati Levante.

According to IHS Markit light-vehicle data, sales of imported vehicles in Japan will reach 337,180 units, edging up 0.4% y/y, for full-year 2017. Imported sales will be led by brands such as Mercedes-Benz, VW, BMW, Audi, and Mini, which will together account for 66% of the total sales during the year. By nameplate, key imported models include the VW Golf with 18,022 units, Mercedes-Benz C-Class with 17,495 units, VW Polo with 13,561 units, and Mini with 13,029 units. According to our data, key Japanese-brand nameplates imported into the country include the Nissan March, Suzuki Baleno, Toyota Avensis, and Mitsubishi Mirage.

About this article

The above article is from AutoIntelligence Daily by IHS Markit. AutoIntelligence Daily provides same-day analysis of automotive news, events and trends.​ Get a free trial.

About The Author

Ms. Namrita Chow is Principal Analyst at IHS Markit for the China automotive market. With over a decade in China, she has firsthand knowledge of the market, the players and the many nuances. Her expertise has helped in forecasting trends, whether within the domestic Chinese automotive market or linked to Chinese vehicle exports in other markets. She has authored special reports as well as daily news analysis, focusing on the intricacies of the vehicle market in China and is available to speak on subjects relating to the Chinese vehicle market.

Ms. Chow’s education includes a Post Graduate Certificate in Economics and Math and a Master of Science degree in Advanced Macroeconomics and Mathematics from the University of London, U.K., as well as two years of intensive Mandarin at Shanghai Jiao Tong University, Shanghai, China.​