February 1, 2012

Forecast for Japan's Motor Vehicle Demand in Calendar Year 2012

Passenger Cars & Commercial Vehicles

  1.  Total Demand for Passenger Cars & Commercial Vehicles
    1. The first half of 2011 saw a major decline from the previous year in Japan's motor vehicle demand, attributable to disruptions in the vehicle supply chain as a result of the March 11 earthquake and related factors. Market supply normalized at the beginning of autumn, enabling the delivery of backlogged orders and a subsequent shift to more robust sales, supported by the launch of new and revamped models. Nevertheless, total demand in 2011 finished below the 2010 level. Sales of passenger cars and commercial vehicles were tracked at 4.21 million units, a decline of 15.1% from the previous year. Demand for new passenger cars and commercial vehicles, excluding mini-vehicles, totalled 2.69 million units, down 16.7% from 2010, while mini-vehicle demand stood at 1.52 million units, down 11.9%.
    2. Sustained economic uncertainty as a result of the European credit crisis, the impact of yen appreciation and other factors are affecting the outlook for 2012.  On the other hand, demand in Japan should be boosted by recovery from the March 11 disaster, reductions in the national automobile tonnage tax, and the application of tax incentives and subsidies for the purchase of “eco-friendly” fuel-efficient vehicles, with total demand for passenger cars and commercial vehicles in 2012 expected to finish at 5.02 million units, a rise of 19.1% over the previous year.  Of that total, sales of new passenger cars and commercial vehicles are forecast at 3.24 million units, up 20.3% from 2011, while mini-vehicle demand should finish at 1.78 million units, up 17.0%.
  2. Standard & Small-Sized Passenger Cars
    1. Sales of standard and small-sized passenger cars in 2011 totalled 2.39 million units, a drop of 18.5% from the previous year. The recovery in demand beginning in the autumn, thanks in part to the launch of new and revamped models, was outweighed principally by the aforementioned post-March 11 supply disruptions, depressed consumer confidence in the wake of that disaster, and further disruptions resulting from the floods in Thailand later in the year.
    2. Demand for standard and small-sized cars in 2012 is forecast at 2.90 million units, up 21.4% from 2011, buoyed by earthquake recovery-related efforts and the tax incentives and subsidies applied to the purchase of eco-friendly vehicles.
  3. Mini Passenger Cars
    1. Total sales of mini passenger cars in 2011 stood at 1.14 million units, down 11.4% from 2010.  Although new models were introduced in autumn, demand in this category did not fully recover from the tight supply conditions resulting from the March 11 earthquake and tsunami.
    2. New model launches in 2011 as well as the tax breaks and subsidies for eco-friendly vehicle purchases are projected to boost minicar sales to a total of 1.40 million units in 2012, a surge of 22.5% from 2011.

  4. Standard Trucks
    1. Although supply disruptions undermined the standard truck market in the wake of the March 11 disaster, sales later turned around in response not only to sustained replacement demand linked to new regulations on diesel emissions, but also new demand related to disaster recovery and reconstruction efforts.  As a result, demand in this category totalled 107,000 units in 2011, a growth of 5.5% over 2010.  Of that total, sales of heavy-duty and medium-sized trucks reached 53,300 units, up 7.0% from 2010. 
    2. Disaster recovery initiatives combined with the tax incentives and subsidies for eco-friendly model purchases should result in total sales in this category in 2012 of 125,000 units, up 16.5% from 2011.  Sales of heavy-duty and medium-sized trucks should finish at a total of 63,000 units, up 18.1% from the previous year.
  5. Small Trucks
    1. In 2011 sales of small trucks stood at 185,000 units, slipping 1.4% from the previous year.  Recovery-fuelled demand for trucks of this size could not overcome the overall impact of the March 11 disaster and yen appreciation, among other factors.
    2. Despite continued economic uncertainty, sales in this category should reach 202,000 units, up 9.1% from 2011, as a result of the tax breaks and subsidies for the purchase of eco-friendly models.

  6. Mini-Trucks
    1. Mini-truck demand in 2011 was tracked at 382,000 units, a drop of 13.4% from the previous year.  In addition to the impact on sales of the March 11 earthquake and tsunami, the structural factors of steadily shrinking numbers of small retailers and farming households (the principal users of these vehicles) contributed to this decline, along with a deterioration in business confidence.
    2. In 2012, notwithstanding the continued impact of the aforementioned structural factors, post-March 11 recovery is expected to buoy demand in this category.  As a result, total sales in 2012 are projected at 385,000 units, up 0.7% from 2011.
  7. Large Buses
    1. A sharp decline in tourism in the wake of the March 11 disaster adversely affected replacement demand for large buses, with total sales in 2011 finishing at only 3,100 units, a plunge of 34.4% from 2010.
    2. Sales in this category in 2012 are projected to rise to a total of 4,100 units, up 30.7% from 2011, owing to a surge in previously postponed replacement demand and the tax incentives and purchasing subsidies in effect for fuel-efficient new models.

  8. Small Buses
    1. Sales of small buses in 2011 dropped to 7,500 units, down 6.0% from the previous year.
    2.  In 2012 total demand in this category should increase to 8,400 units, up 11.8% from 2011, largely owing to the tax and subsidy measures applied to the purchase of eco-friendly models.

Motorcycles

  1. Total Demand for Motorcycles
    1. Japan’s domestic motorcycle market continues to struggle with a protracted slump, attributable not only to structural factors but also to higher vehicle prices stemming from mandatory compliance with new emissions regulations enforced in 2007 and the resulting smaller range of available models.  Nevertheless, motorcycle sales in Japan in 2011 surged 5.1% from 2010 to 445,000 units, marking the first overall increase in six years, with year-on-year gains posted in both the Class-1 motor-driven cycle and mini-sized motorcycle categories.
    2. Despite the growth registered in 2011, owing in part to manufacturers’ efforts to market products closely tailored to consumer needs, total demand in 2012 is projected at 433,000 units, down 2.7% from 2011.  The decline will likely be seen in the Class-1 motor-driven cycle segment, while demand in the Class-2 motor-driven cycle and mini- and small-sized motorcycle categories is expected to remain firm.
  2. Class-1 Motor-Driven Cycles (50cc & under)
    1. Demand in this category in 2011 stood at 257,000 units, a gain of 11.2% over the previous year, attributable not only to the introduction of new models but also to consumers’ focus on economy and energy conservation, driven by Japan’s ongoing economic doldrums and the impact of the March 11 earthquake, among other factors.
    2. The impact of new models in the marketplace is expected to run its course in 2012, resulting in a projected demand in this category of 236,000 units, a decrease of 8.2% from 2011.

  3. Class-2 Motor-Driven Cycles (51cc-125cc)
    1. In 2011 demand for Class-2 motor-driven cycles totalled 96,000 units, dipping 0.7% from the previous year, attributable to a decline in the impact of new models introduced in 2010.
    2. On the other hand, new models introduced in 2011 should help raise sales in this category to 103,000 units in 2012, up 7.6% from the previous year.

  4. Mini-Sized Motorcycles (126cc-250cc)
    1. Mini-sized motorcycle sales in 2011 reached 39,000 units, rising 3.3% from 2010.  This growth is attributable to favorable consumer response to sports-type models, even as the demand for scooters in urban areas continues to slide.
    2. In 2012 the appeal of sports-type models should continue to drive demand in this segment, resulting in projected sales of 40,000 units, a gain of 2.9% over 2011.

  5. Small-Sized Motorcycles (over 250cc)
    1. Sales of small-sized motorcycles in 2011 finished at 53,000 units, down 8.2% from the previous year.  The decline in this segment in particular reflected consumer response to the continued sluggishness of the domestic economy, affecting employment and personal incomes, and the impact of the March 11 disaster.
    2. An increase in the number of small-sized motorcycles on the market in 2012 should help boost demand in this category to 54,000 units, a 1.2% rise from 2011.

[Data chart attached (PDF)]