Japanese vehicle production grows 5.2% y/y in 2017, exports up 1.5% – JAMA
Japanese vehicle output grew 5.2% year on year (y/y) during 2017 to 9.68 million units, while exports grew by 1.5% y/y to 4.71 million units as shipments to key markets such as the US and Europe increased.
IHS Markit perspective
- Implications: The overall increase in vehicle production in Japan during 2017 can be attributed to an improvement in domestic sales, mainly driven by new model launches, as well as exports. Japan's mainstream automakers posted mixed results during the year, with Honda, Mazda, and Subaru registering declines.
- Outlook: According to IHS Markit's light-vehicle production forecast, Japanese output will reach 8.84 million units in 2018, down 3.9% y/y from the 2017 estimate of 9.21 million units, mainly due to expected declines in domestic sales and exports.
Japanese vehicle production, including passenger vehicles, trucks, and buses, totalled 791,315 units during December 2017, according to figures released by the Japan Automobile Manufacturers' Association (JAMA). This represented a 1.3% year-on-year (y/y) increase from 781,484 units during the same month in 2016. Output in the passenger car category reached 688,677 units during the month, up 1.1% y/y, and truck production grew 2.6% y/y to 93,789 units. Bus production during the month declined 2.6% y/y to 8,849 units.Within the passenger car category, production of standard cars with an engine displacement in excess of 2.0 litres was up 3.5% y/y to 430,261 units in December, while output of small vehicles declined by 6.1% y/y to 134,393 units. Output of minivehicles, categorised as vehicles equipped with engines smaller than 660cc, grew 1.6% y/y to 124,023 units.Vehicle exports during the month grew 2.5% y/y to 433,390 units. Shipments to North America, the largest overseas destination for Japanese-made vehicles, declined 3.7% y/y to 182,962 units. North America was followed by Europe with 72,152 units (down 4.6% y/y), Asia with 54,037 units (up 4.2% y/y), the Middle East with 47,624 units (up 18.1% y/y), and Oceania with 38,402 units (up 32.6% y/y). Shipments to Central America reached 15,649 units (up 7.7% y/y), followed by South America with 11,128 units (up 0.5% y/y) and Africa with 10,608 units (up 6.9% y/y).
In December, Toyota-brand vehicles continued to lead overall output with 262,401 units, an 8.5% y/y increase. Mazda held second spot during the month as its output grew by 8.3% y/y to 83,177 units. Suzuki followed closely with 81,693 units produced in December, up 20.7% y/y. This was the 12th consecutive increase for Suzuki and can be mainly attributed to a rise in production for both the domestic market and exports. The automaker's exports surged 44.6% y/y during the month thanks to a rise in shipments to areas including Europe. Daihatsu came fourth with 77,336 units (up 8.8% y/y), followed by Honda and Nissan with 76,758 (down 1.5% y/y) and 69,226 units (down 28.7% y/y), respectively. In seventh spot, Subaru's production volumes increased by 2.7% y/y to 61,560 units. Lastly, Mitsubishi's production declined 12.4% y/y to 46,191 units during December, the first decrease in eight months.
Full-year 2017 results
Total vehicle production in the country grew by 5.2% y/y to 9.68 million units during 2017. Output in the passenger car category reached 8.35 million units during the year, up 6.0% y/y, and truck production grew 1.0% y/y to 1.21 million units. Bus production during 2017 declined 5.4% y/y to 122,679 units.
Within the passenger car category, production of standard cars with an engine displacement in excess of 2.0 litres was up 3.0% y/y to 5.15 million units in 2017, while output of small vehicles grew by 6.5% y/y to 1.72 million units. Output of minivehicles, categorised as vehicles equipped with engines smaller than 660cc, surged 17.5% y/y to 1.48 million units.
Vehicle exports during the year grew 1.5% y/y to 4.71 million units. Shipments to North America, the largest overseas destination for Japanese-made vehicles, grew 1.4% y/y to 1.93 million units. North America was followed by Europe with 864,518 units (up 5.6% y/y), Asia with 601,204 units (up 2.4% y/y), the Middle East with 443,963 units (down 11.3% y/y), and Oceania with 434,458 units (up 10.4% y/y). Shipments to Central America reached 190,422 units (up 4.2% y/y), followed by South America with 129,814 units (up 16.2% y/y) and Africa with 108,845 units (down 19.1% y/y).
During 2017, Toyota-brand vehicles continued to lead overall output with 3.19 million units, a marginal increase of 0.7% y/y. Nissan held second spot during the year as its output grew 7.4% y/y to 1.02 million units, mainly thanks to an 11.2% y/y increase in exports to 627,385 units. Suzuki followed with 987,537 units produced in 2017, up 24.3% y/y. Its exports surged 75.6% y/y during the year to 206,744 units. Mazda came fourth with 971,455 units (down 0.6% y/y), followed by Daihatsu and Honda with 919,516 units (up 27.2% y/y) and 817,500 units (down 0.3% y/y), respectively. Honda's exports plunged 44.9% y/y during the year to 81,061 units as it moved production of the Fit car for the North American market from Japan to Mexico. In seventh spot, Subaru's production volumes fell 2.5% y/y to 709,643 units. Lastly, Mitsubishi's production grew by 4.4% y/y to 579,642 units during 2017, the first increase in three years.
Outlook and implications
The overall increase in vehicle production in Japan during 2017 can be attributed to improvements in domestic sales, mainly driven by new model launches, as well as exports. The Japanese market also experienced a rush in demand at the beginning of the year ahead of the tightening of fuel-economy standards from April 2017. In a bid to promote and support eco-car sales, the government extended the eco-car tax benefits for another two years from April 2017 to April 2019, but also raised the threshold for eligibility for the scheme.
Japan's mainstream automakers posted mixed results during the year, with Honda, Mazda, and Subaru registering declines. Among the largest gainers were Daihatsu and Suzuki thanks to surging demand for minivehicles in Japan and a low base of comparison.
Meanwhile, Mitsubishi's sales had declined for 13 consecutive months before they began to grow from May 2017 onwards as the automaker struggled in the aftermath of last year's fuel-economy scandal. Mitsubishi suspended domestic sales and production of four of its minivehicles in April 2016. The number of affected models grew to 12 after the automaker was found in August 2016 to have overstated mileage data for eight more models. Another scandal surfaced in the Japanese market when both Nissan and Subaru admitted to having used unauthorised inspectors to conduct final safety checks. Following the scandal, Nissan issued a recall of more than 1.2 million vehicles and temporarily halted production for the local market at its plants across Japan.
According to IHS Markit's production forecasts, light-vehicle output in Japan, including passenger vehicles and light commercial vehicles, will decline by 3.9% y/y to 8.84 million units in 2018, down from a 2017 estimate of 9.21 million units, mainly due to expected declines in domestic sales and exports. According to our forecasts, light-vehicle sales in the country will fall 2.5% y/y to 5.01 million units this year, while exports are expected to decline by 3.0% y/y to 4.37 million units.
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