January 30, 2014

Forecast for Japan's Motor Vehicle Demand in Calendar Year 2014

I. Passenger Cars & Commercial Vehicles

1. Total Demand for Passenger Cars & Commercial Vehicles

  1. Total demand for passenger cars and commercial vehicles in calendar year 2013 finished at 5.38 million units, up 0.1% over the previous year, with sales of passenger cars and CVs, excluding mini-vehicles, totalling 3.26 million units, down 3.8% from 2012, and sales of mini-vehicles reaching 2.11 million units, up 6.7%.  Despite economic stimulus measures and a gentle business recovery, sales in the first six months of 2013 dipped compared with the same period in the previous year, owing primarily to the termination of eco-friendly vehicle tax incentives and purchasing subsidies in the latter half of 2012.  In the second half of 2013, the vehicle market saw a same-period year-on-year increase, buoyed by economic recovery, new and revamped model launches, and a surge in last-minute demand before the scheduled increase in Japan’s consumption tax this April.  As a result of all these trends, sales for 2013 as a whole finished on a par with the 2012 level.  
  2. For 2014, expectations are that the national economy will be boosted by export growth fuelled by gradual global economic recovery, rising capital investment aided by improved corporate earnings, and increased public works spending linked to economic policy measures.  There are concerns, however, about a possible decline in consumer sentiment triggered by the consumption tax hike, as well as fears of a drop in demand following the pre-tax hike purchasing rush in the second half of 2013.  Total sales of new passenger cars and commercial vehicles are therefore forecast at 4.85 million units, down 9.8% from 2013, with passenger cars and CVs, excluding mini-vehicles, totalling 3.0 million units, down 8.0% from 2013, and sales of mini-vehicles vehicles finishing at 1.85 million units, down 12.4%.

2. Standard & Small-Sized Passenger Cars

  1. Despite the positive impacts of economic recovery, the introduction of new and revamped vehicle models, and the surge in last-minute demand prior to the consumption tax hike, sales of standard and small-sized passenger cars in 2013 totalled 2.87 million units, a decline of 4.7% from the previous year, attributable mostly to the termination of the government’s eco-friendly vehicle tax incentives and purchasing subsidies. 
  2. Demand for standard and small-sized passenger cars in 2014 is forecast at 2.61 million units, down 9.1% from the previous year, owing largely to the anticipated drop in demand following the aforementioned last-minute, pre-consumption tax hike sales spike in the second half of 2013 and to declining consumer confidence overall.

3. Mini Passenger Cars

  1. Sales of mini passenger cars in 2013 reached 1.69 million units, a rise of 8.5% over 2012.  In addition to economic recovery and last-minute purchasing in the second half of 2013 ahead of the increase in the consumption tax, the impact of new and revamped model launches was a major factor contributing to this growth.
  2. Demand in this category in 2014 is projected at 1.47 million units, down 13.0% from 2013.  The anticipated drop in sales following last-minute purchasing in the second half of 2013 prior to the rise in the consumption tax, a fall in consumer confidence, and the waning impact of new and revamped models introduced in 2013 are expected to contribute to this decline.

4. Standard Trucks

  1. Sales of standard trucks in 2013 were tracked at 143,000 units, up 5.1% over 2012.  Sales in the first half of 2013 finished below the first-half level recorded in the previous year, owing largely to the termination of the eco-friendly vehicle tax incentives and purchasing subsidies in the latter half of 2012.  Full-year results, however, rose over the 2012 level as a result of an increase in replacement demand buoyed by the business recovery, expanded public works spending, and other positive factors.  Of that total, sales of heavy- and medium-duty trucks numbered 73,000 units, up 5.3% from 2012.
  2. In 2014, solid replacement demand and the impact of increased public works spending are expected to drive sales of standard trucks to 151,000 units, up 5.4% from 2013.  Breaking down that total, sales of heavy- and medium-duty trucks are forecast at 77,000 units, up 5.2% from 2013.

5. Small Trucks

  1. Demand for small trucks in 2013 finished at 236,000 units, up 3.8% from the previous year.  A rise in replacement demand fuelled by economic recovery was the key factor behind this growth.
  2. Total sales of small trucks in 2014 are projected at 228,000 units, down 3.3% from 2013, with the main factor behind this decline expected to be the drop in demand following the last-minute purchasing rush in the second half of 2013 ahead of the consumption tax increase this April.

6. Mini-Trucks

  1. Mini-truck demand in 2013 stood at 423,000 units, edging up 0.3% from 2012.  While the declining ranks of, principally, small retailers and farming household users acted as a negative factor, the impacts of economic recovery and the introduction of revamped models pushed the final year-on-year sales tally in this category to positive growth.
  2. Sales of mini-trucks in 2014 should reach 380,000 units, down 10.1% from the previous year, owing not only to falling demand following the purchasing rush in the second half of 2013 ahead of the consumption tax hike this April, but also to the waning impact of revamped models introduced in 2013 and the continued decline in mini-truck purchases by small retailers and farming households.

7. Large Buses

  1. Sales of large buses in 2013 totalled 4,200 units, down 2.0% from the previous year. While the recovery in demand for touring buses was a positive contributing factor, the final tally in this category was pulled down by the termination of the government’s eco-friendly vehicle tax incentives and purchasing subsidies in 2012.
  2. Demand for large buses in 2014 is forecast at 4,000 units, down 4.3% from 2013, as a result of the impact of structural factors including the ongoing decline in overall bus transport demand, despite the anticipated continued solid demand for touring buses.

8. Small Buses

  1. Sales of small buses in 2013 totalled 7,100 units, down 7.8% from 2013.  The impacts of economic recovery were outweighed primarily by the termination of the tax incentives and purchasing subsidies in 2012 and by decreased transport demand.
  2. The 2014 forecast for small bus demand stands at 7,000 units, a 1.1% pullback from the year before, attributable primarily to anticipated falling sales in the wake of the pre-consumption tax hike purchasing rush in the latter half of 2013 and the ongoing decline in transport demand.

II. Motorcycles

1. Total Demand for Motorcycles

  1. Japan’s domestic motorcycle market has seen an overall decline since 2006.  Negative factors behind this prolonged trend include the chronic shortage of parking bays in urban areas, higher vehicle prices stemming from mandatory compliance with new emissions regulations, and shrinking model lineups overall.  Since 2010, however, efforts to offer products more closely geared to consumer needs and tastes appear to be having some effect in slowing the decline.  In 2013, motorcycle sales in Japan totalled 460,000 units, up 4.1% from the previous year.  This performance is attributable to demand levels exceeding the previous year’s for Class-2 motor-driven cycles, mini-sized motorcycles, and small-sized motorcycles.
  2. While sales of Class-2 motor-driven cycles in 2014 are projected to finish below their 2013 level, year-on-year gains are forecast for the Class-1 motor-driven cycle, mini-sized motorcycle and small-sized motorcycle categories.  As a result, total domestic demand is forecast at 463,000 units, up 0.6% from 2013.

2. Class-1 Motor-Driven Cycles (50cc & under)

  1. Sales of Class-1 motor-driven cycles in 2013 finished at 239,000 units, down 3.0% from 2012, owing to the continued harsh market climate for these vehicles.
  2. Demand in this category in 2014 is forecast at 240,000 units, a modest increase of 0.5% from 2013, anticipated as a result of the introduction of new models.

3. Class-2 Motor-Driven Cycles (51cc-125cc)

  1. Demand for Class-2 motor-driven cycles in 2013 came in at 101,000 units, a gain of 11.8% over the previous year, attributable primarily to the introduction of new models.
  2. With the impact of new models expected to have largely run its course, sales in this category are projected to decline to 940,000 units, down 6.9% from 2013.

4. Mini-Sized Motorcycles (126cc-250cc)

  1. The final tally for mini-sized motorcycles in 2013 stood at 55,000 units, posting a robust 22.4% rise from the previous year.  This growth reflects an increased demand for sports-type models and the impact of an expanded lineup of compact scooter models.
  2. Sports-type models and compact scooters are expected to continue to drive demand in this category in 2014, with overall sales of mini-sized motorcycles projected at 59,000 units, a 6.4% increase from 2013.

5. Small-Sized Motorcycles (over 250cc)

  1. Demand for small-sized motorcycles in calendar 2013 finished at 65,000 units, up 7.5% from the previous year.  This growth is largely attributable to a wider choice of new models and a model lineup that more closely matched consumer needs.
  2. In 2014, the continued introduction of new models, among other factors, is expected to boost sales of motorcycles in this category to 70,000 units, a rise of 7.2% from the previous year.

[Data chart attached (PDF)]