December 24, 2009

Forecasts for Japan's Passenger Car & Commercial Vehicle Demand in Calendar Year 2010

Motor Vehicles

  1. Total Demand for Passenger Cars & Commercial Vehicles
    1. Total sales of passenger cars and commercial vehicles in Japan in calendar year 2009 should finish at 4.61 million units, a decline of 9.3% from the previous year. Demand for new vehicles excluding mini-vehicles is estimated at 2.92 million units (down 9.1% from 2008), while mini-vehicle demand is estimated at 1.69 million units (down 9.5%).
      The first half of 2009 finished far below the levels achieved in the same period in 2008. Stagnant corporate activity, the serious deterioration in the employment and income environments (resulting in flat consumer spending) and other developments stemming from the global financial crisis-induced economic downturn all contributed to this outcome.
      The market bounced back as demand rallied—particularly for standard and small-sized passenger cars—in the second half of the year, spurred by tax reductions and purchasing subsidies applied to eco-friendly vehicles. Overall demand in 2009 is, however, expected to finish below the level of the previous year.
    2. The projection for calendar 2010 is that demand will be stimulated by various factors including a gradual recovery in the Japanese economy and the continued application of tax cuts and purchasing subsidies for eco-friendly vehicles. As a result, total demand for passenger cars and commercial vehicles should reach 4.80 million units, up 4.1% from 2009. Demand for new vehicles excluding mini-vehicles is forecast at 3.12 million units (up 6.7% from the current year), and demand for mini-vehicles at 1.68 million units (down 0.6%).
  2. Standard & Small-Sized Passenger Cars
    1. Sales of standard and small-sized passenger cars in 2009 should finish at 2.64 million units, a year-on-year decline of 5.7% attributable to the major retreat in consumer confidence in the first half of the year resulting from the worsening status of employment and incomes accompanying the economic slowdown, as explained above. And despite rallying demand in the second half of 2009, attributable to tax cuts and purchasing subsidies for eco-friendly vehicles and also to the launch of new or revamped models, the full-year total for this category is expected to finish below the 2008 level.
    2. Demand for standard and small-sized cars in 2010 is forecast at 2.80 million units, a gain of 6.1% over the previous year, owing to various factors including the continued application of tax cuts and purchasing subsidies for eco-friendly vehicles.
  3. Mini Passenger Cars
    1. Mini passenger car sales in 2009 are estimated at 1.29 million units, down 9.7% from the previous year. Factors contributing to the status of sales in this category are the same as those behind the sales performance of standard and small-sized passenger cars (see 2.1). As with the latter segment, sales of mini passenger cars in 2009 are expected to finish below the level of the previous year.
    2. In 2010, based on projections for a continued boost from eco-friendly vehicle tax cuts and purchasing subsidies, total demand for mini passenger cars should reach 1.29 million, up 0.2% from 2009.
  4. Standard Trucks
    1. Standard truck demand in 2009 is projected at 87,000 units, down 40.7% from 2008. First-half results will surely finish well below those of the same period the previous year, owing to reduced payloads and declining corporate earnings in the wake of the broad-based economic downturn. While the second half saw demand rise on the strength of tax cuts and purchasing subsidies for eco-friendly vehicles, the overall 2009 total is expected to be significantly lower than that of the previous year. Within this category, demand for heavy-duty and medium-sized trucks should stand at 40,000 units, a 46.5% plunge from 2008.
    2. Sales in this category in 2010 are forecast at 111,000 units, up 27.6% from 2009. In addition to projections for increased payloads accompanying economic recovery, other factors contributing to this anticipated turnaround include the continued application of tax cuts and purchasing subsidies for eco-friendly vehicles. For heavy-duty and medium-sized trucks, demand should reach 56,000 units, a year-on-year increase of 40.0%.
  5. Small Trucks
    1. Sales of small trucks in 2009 should total 179,000 units, down 28.3% from 2008. Factors contributing to the status of sales in this truck category are the same as those behind the sales performance of standard trucks (see 4.1). As with the latter segment, sales of small trucks in 2009 are expected to finish below the level of the previous year.
    2. In 2010, sales in this category are forecast to rise 6.7% from 2009 to a total of 191,000 units. Factors contributing to this anticipated growth include projections for increased payloads accompanying economic recovery as well as the continued application of tax cuts and purchasing subsidies for eco-friendly vehicles.
  6. Mini-Trucks
    1. Mini-truck demand in 2009 is projected to finish at 403,000 units, down 9.0% from the previous year. There are several factors behind this decline, including the shrinking numbers of small retailers and farming households (the principal users of these vehicles) and the sharp economic slump, primarily in the first half of the year. Although demand in the second half was stimulated by the introduction of purchasing subsidies, sales for 2009 overall should nevertheless be significantly lower than the results posted in 2008.
    2. In 2010, the ongoing application of the eco-friendly vehicle purchasing subsidies is expected to continue to encourage demand. However, taking into account the aforementioned ongoing changes in market structure, sales in this category are forecast at 390,000 units, down 3.2% from 2009.
  7. Large Buses
    1. Sales of large buses in 2009 should reach 4,200 units, down 21.6% from 2008. The drop in replacement demand resulting from the economic recession is the main factor behind this decline.
    2. In 2010, economic recovery is expected to be accompanied by an upturn in replacement demand in this category, with demand projected to finish at 4,200 units—that is, on a par with the 2009 level.
  8. Small Buses
    1. Demand for small buses in 2009 should total 8,300 units, down 16.8% from 2008. The key factor behind this slump was the decline in replacement demand caused by the economic downturn.
    2. In 2010, stepped-up replacement demand accompanying economic recovery should result in total annual sales in this category of 9,200 units, up 10.8% from 2009.

Motorcycles

  1. Total Demand for Motorcycles

    Although motorcycle demand in Japan this year has benefited from the introduction of new models, market conditions remain harsh. This is the result not only of the economic downturn triggered by the global financial crisis, but also of higher vehicle prices reflecting mandatory compliance with emissions regulations and, in addition, the shortage of motorcycle parking availability in urban areas, among other factors. Against this backdrop, total current and upcoming demand for motorcycles in Japan is projected as follows.

    1. Total motorcycle demand in Japan in calendar 2009 should finish at 432,000 units, down 23.7% from 2008, with declining sales having been recorded in all motorcycle displacement categories.
    2. No recovery in demand is foreseen in 2010 for Class-1 motor-driven cycles, the category comprising the lion’s share of motorcycle demand in Japan. As a result, total domestic motorcycle demand next year is expected to drop to 404,000 units, down 6.5% from 2009.
  2. Class-1 Motor-Driven Cycles (50cc & under)
    1. Sales of Class-1 motor-driven cycles in 2009 are projected at 255,000 units, down 13.8% from 2008. The primary factors behind this decline are the economic downturn and its impact on consumer confidence as well as a longer vehicle replacement cycle.
    2. In 2010, notwithstanding an anticipated gradual recovery of the economy, a further decline in demand is projected as a result of a continued slump in consumer confidence and other negative trends. Consequently, sales in this category are forecast at 230,000 units, a drop of 9.8% from 2009.
  3. Class-2 Motor-Driven Cycles (51cc-125cc)
    1. Demand for Class-2 motor-driven cycles in 2009 should finish at 66,000 units, a plunge of 45.5% from 2008, when sales in this category surged owing to expanding consumer appreciation of these vehicles’ economy in the light of soaring fuel prices (and, as a result, their wider use in daily commuting), as well as a rush of last-minute purchases prior to scheduled vehicle price hikes stemming from mandatory compliance with emissions regulations. That surge largely set the stage for a reactionary downturn in 2009, which in fact occurred.
    2. In 2010, favorable factors including the impact of new model launches and users’ downsizing to this category (primarily from mini-sized motorcycles) should result in sales of 73,000 units—a gain of 10.6% over 2009.
  4. Mini-Sized Motorcycles (126cc-250cc)
    1. Mini-sized motorcycle sales in 2009 should total 48,000 units, down 32.6% from 2008. Demand in this category has suffered considerably as a result of the economic downturn and a notable decline in consumer confidence among younger age groups, as well as a continuing reluctance to purchase and use these vehicles in urban areas, where there is a discouragingly severe shortage of parking bays.
    2. In 2010, continued harsh conditions in the employment and income environments and users’ downsizing to motorcycles with smaller engine displacement should result in total annual sales in this category of 42,000 units, a 12.5% decline from 2009.
  5. Small-Sized Motorcycles (over 250cc)
    1. Sales of small-sized motorcycles in 2009 are estimated at 63,000 units, a drop of 19.3% from 2008. Despite expectations that demand for these larger models for recreational purposes would remain firm (especially among middle-aged and elderly riders), the negative impact of declining wages on sales in this category has been significant.
    2. In 2010, despite the anticipated gradual economic recovery, factors contributing to a further decline in sales in this category include the postponement of replacement purchases on the part of users amid the uncertain status of employment and incomes and, in addition, a reduced model line-up as a result of emissions regulations compliance. Overall demand for these motorcycles in 2010 is therefore projected at 59,000 units, down 6.3% from 2009.

[Data chart attached (PDF)]