FY 2014 Japanese sales outlook exceeds 5.1 million units

Sales of 5.69 million units in FY 2013 triggered by consumer confidence and pre-buying

2014/05/02

Summary

 In the fiscal year ended in March 2014 (FY 2013), vehicle sales in Japan increased by 9.2% year-over-year (y/y) to 5.69 million units. This marks the highest level since FY 2006, when 5.62 million units were sold. The strong sales were thanks to an increased consumer spending under the "Abenomics"economic scheme, new model launches by each automaker, and last-minute demand before the consumption tax hike that started in April 2014.

 In April and onward, downturn in demand and sales is anticipated after the robust sales before the tax increase. In FY 1997, when the consumption tax was raised last time in April, sales volume plunged by 13.9% y/y to 6.28 million units. This sharp drop can also be attributed to other unfavorable economic conditions in July and later, such as the Asian currency crisis that began in July and the voluntary closure of Yamaichi Securities in November, 1997.

 Regarding FY 2014 sales in Japan, outlooks differ among organizations. The Japan Automobile Manufacturers Association, Inc. (JAMA) forecasts that vehicle sales in Japan will decrease by 16.6% y/y to 4.75 million units in FY 2014 (announced on March 20, 2014). This reflects JAMA's pessimistic view with a decrease larger than 13.9% experienced in FY 1997, when the economy stagnated. Major automakers and think tanks are suggesting brighter prospects between 5.1 million units and 5.3 million units (y/y decrease between 10.4% and 6.9%) based on current economic and sales situations.

 Japanese economic conditions are different between FY 2014 and FY 1997, when Japan was hit by the Asian currency crisis. Accordingly, FY 2014 sales volume is unlikely to decline to the same degree as in FY 1997 (13.9%). As forecasted by Honda and Nissan, sales over 5 million units, down 10% y/y, seem to be a reasonable outlook for FY 2014.

 A U.K research firm, LMC Automotive, estimates that sales of light vehicles will decrease slightly to 5.22 million units in calendar year (CY) 2014. Its outlook for CY 2015 suggests a 11.7% decrease y/y to 4.61 million units, due to downturn between January and March after the last-minute demand.

 

Data Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar. Total
Sales
volume
:1000
units
FY
1996
516 481 591 680 395 658 576 652 562 446 665 1,065 7,288
FY
1997
438 428 557 610 357 614 511 518 515 353 525 849 6,275
FY
2013
365 368 451 472 367 523 422 457 423 496 565 783 5,692
FY
2014
345
(FY
2014
simu
-lation)
310 327 425 424 331 487 374 364 388 392 446 624 4,893
Rate
of
change
FY
1996
1.8% 3.7% -4.2% 4.8% -3.1% 4.0% 5.8% 9.9% 9.3% 11.5% 9.1% 11.3% 5.7%
FY
1997
-15.1% -10.9% -5.8% -10.3% -9.7% -6.8% -11.3% -20.5% -8.4% -20.9% -21.2% -20.3% -13.9%
FY
2013
1.5% -6.9% -10.8% -8.0% -1.1% 17.0% 17.3% 16.1% 25.0% 29.4% 18.4% 17.4% 9.2%
FY
2014
-5.5%

(Source) Statistic of Japan Automobile Manufacturers Association (JAMA) [Updated on May 1, 2014]

Related Reports:
Outlook of Japanese market in 2014 (Japanese market analysis part 1) (Jan. 2014)
2013 Sales by model & engine displacement (Japanese market analysis part 2) (Jan. 2014)