September 30, 2011

Revised Forecast for Japan's Vehicle Demand in Calendar Year 2011

Released by the Japan Automobile Manufacturers Association (JAMA) in December 2010, the original forecast for vehicle demand in Japan in calendar 2011 became inapplicable as a consequence of the earthquake and tsunami that devastated northeastern Japan on March 11 this year and various resulting factors, including a shifting economic environment, changes in consumer confidence, and severe disruptions in automakers’ supply chains. 

With the domestic production operations of Japan’s vehicle manufacturers now well on the way to full recovery, present conditions have made it possible to formulate revised demand projections for the current calendar year.  The revised general demand forecast for 2011 is as follows, with specific data projections for individual vehicle categories listed in the attachment.

1. Passenger Cars & Commercial Vehicles
Demand for passenger cars and commercial vehicles during the second and third quarters of 2011 declined as a result of supply shortages in the wake of the March 11 disaster.  Looking ahead to the fourth quarter, strong uncertainty prevails with regard to the future of the Japanese economy in view of such negative factors as steep yen appreciation and fears of slowdowns in overseas economies. Total demand for passenger cars and commercial vehicles in 2011 has therefore been revised to 4.25 million units, down 14.2% from the previous year.
 
1) Passenger Cars
Despite the firmly-established demand for eco-friendly cars and, in the latter part of the year, the normalization of market supply, total demand for passenger cars in 2011 is projected to decline from 2010 as a result of the sharp drop in sales in the second and third quarters, following the March 11 disaster.

2) Trucks
Although Japan’s post-new long-term regulations on heavy-duty truck emissions had been expected to generate vehicle replacement demand in 2011, and despite the anticipation that post-quake reconstruction activities will trigger a year-on-year increase in demand for standard and small-size trucks beginning in the fourth quarter, overall demand for trucks in 2011 is forecast to fall from the previous year’s level.  The year-on-year slump in truck demand in the aftermath of the earthquake and tsunami on March 11 is the main factor behind this projected decline.  Secondary factors include, with respect specifically to mini-truck sales, changes in demand structure.      

3) Buses
Demand for buses in 2011 is also expected to drop from the 2010 level, as a consequence of tourism having fallen off sharply year-on-year since the events of March 11.

2. Motorcycles
The motorcycle market in Japan has been locked in a prolonged slump, attributable to a number of factors including the shrinking youth population and shifts in market trends for consumer goods.  In 2011, however, the introduction of new models is expected to help boost overall motorcycle sales to a total of 435,000 units, up 2.7% from 2010.

1) Class-1 Motor-Driven Cycles (50cc & under)
Demand is forecast to surge in this category over the previous year, as a result, first, of a general focus on economy and energy conservation (driven by the impact of the recent recession and by the March 11 disaster) and, second, of the introduction of new models.

2) Class-2 Motor-Driven Cycles (51cc & over)
In 2011 sales of motorcycles with engine capacity of 51cc or greater—with the exception of motorcycles in the small-sized category (over 250cc), for which demand is projected to decline amid economic uncertainty—are expected to grow compared to 2010, owing partly to the introduction of new models in both the Class-2 (51cc-125cc) and mini-sized (126cc-250cc) categories.  

Attachment: Revised forecast data for vehicle demand in Japan in calendar 2011, by type and category

[Data chart attached (PDF)]