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New vehicle sales in Japan decline nearly 5 percent during March
Japanese sales of mainstream registered vehicles declined 4.7% year on year (y/y) during March to 417,373 units, according to data released by the Japan Automobile Dealers' Association (JADA) today (1 April). This figure excludes mini-vehicles, thus covering all vehicles with engines greater than 660 cc, including both passenger vehicles and commercial vehicles (CVs), sold in Japan. Of this total, sales of passenger and compact cars declined 5.7% y/y to 357,254 units in March, while truck sales were up 1.9% y/y to 57,652 units and bus sales declined 5.4% y/y to 2,467 units. In the year-to-date (YTD) period (January-March), sales of mainstream registered vehicles were down 1.2% y/y to 966,831 units. Of this total, sales of passenger and compact cars declined 2.1% y/y to 836,023 units, while truck sales were up 5.4% y/y to 126,325 units and bus sales declined 1.4% y/y to 4,483 units.
Outlook and implications
New vehicle sales in Japan declined 4.7% y/y in March after increasing 1.3% y/y during February and 2.3% y/y during January. Year 2018 saw mixed results with mainstream vehicles sales declining 1.3% y/y and mini-vehicles registering growth of 4.4% y/y.
Japan's mini-vehicle segment declined 2.5% y/y in March after posting eight consecutive months of growth. In the YTD, sales in this segment were down marginally 0.2% as the automakers posted mixed results. In 2018, sales were up 4.4% y/y to 1.924 million units owing to all the major players reporting growth during the year.
The Japanese government is all set to go ahead with the consumption tax hike from 8% to 10% planned for October 2019. The move is expected to dent automobile sales in the country and the government is already working on ways to level off the impact. In December 2018, Japanese legislators signed a draft tax reform package, offering tax breaks to buyers when the consumption tax hike kicks in. Last month, the Japan Automobile Manufacturers' Association (JAMA) said that it expects new vehicle sales in Japan to fall 2% y/y to 5.22 million units in 2019 amid growing economic uncertainty. It expects mini-vehicle sales to fall 4.5% y/y to 1.87 million units and passenger car sales, excluding mini-vehicles, are estimated to fall 0.5% y/y to 3.35 million units.
IHS Markit currently forecasts that light-vehicle sales in Japan will total nearly 5.19 million units during 2019, up 0.6%. Of this total, passenger car sales, which account for nearly 84% of the overall market, are expected to increase 0.5% to 4.37 million units, while sales of LCVs are forecast to grow 1.4% to around 823,000 units during the year.
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