Toyota Motor Corp. and Nissan Motor Co. led the biggest drop in Japan’s auto sales in 34 years as the country’s recession and wage cuts damped demand.
Sales of cars, trucks and buses, excluding minicars, fell 27 percent to 215,783 in November, the Japan Automobile Dealers Association said in a statement today. Sales dropped 28 percent at Toyota Motor Corp., Japan’s largest automaker, and 30 percent at Nissan Motor Co. Domestic sales for South Korea’s five automakers dropped to the lowest in more than three years.
Japan’s automakers have slashed their earnings forecasts for this fiscal year as declining wages and tight credit curb consumer spending. Wages in the world’s second-largest economy dropped for the first time this year in October as companies cut overtime payments by the most in more than six years.
“If income and wealth don’t rise, consumption won’t either,” said Mitsuo Shimizu, a Tokyo-based analyst at Cosmo Securities Co. “Large purchases like cars are particularly vulnerable.”
Prime Minister Taro Aso announced a 5 trillion yen ($52.5 billion) stimulus package in October to boost consumer spending, and the Bank of Japan cut the benchmark rate to 0.3 percent to encourage lending.
“The financial crisis is exacerbating already low consumer sentiment,” JADA Director Takeshi Fushimi said today, adding that car sales for the year may be the lowest since 1974.
Excluding the Lexus brand, Toyota’s sales fell to 106,342 vehicles and Nissan’s dropped to 30,134. Honda’s sales slumped 22 percent to 29,448 last month. Mazda Motor Corp.’s fell 33 percent to 9,699 vehicles.
Toyota lost 1.8 percent to 2,945 yen at the close of trading in Tokyo. Nissan slumped 2.8 percent and Honda Motor Co. declined 2.9 percent.
+ Nov. 2008 Auto Sales: Still Dreary, But Likely Up From Oct.
+ October 2008 Auto Sales: GM Drop 45%,Toyota 23%
Korean Carmakers
South Korea’s domestic auto sales dropped 27 percent to 74,217 in November. Hyundai Motor Co., the country’s biggest carmaker, reported a 34 percent decline to 35,902. Sales at GM Daewoo Auto & Technology Co., ranked third, plunged 57 percent. Kia Motors Corp., the second-largest, said sales rose 3.7 percent, making it the sole gainer among the five carmakers in South Korea.
Japanese companies plan to fire about 30,000 temporary and part-time workers before the end of the business year in March, the Labor Ministry said last week. Toyota will cut its domestic temporary workforce by 3,000 jobs, or 50 percent, by the end of March.
Government Aid
Nissan Chief Executive Officer Carlos Ghosn called for governments in the U.S., Europe and Japan to aid carmakers to prevent more job losses.
“It’s important for governments to finance industries that employ a lot of workers,” Ghosn said in a symposium in Tokyo today. “The recent credit crunch has made it difficult to finance day-to-day operations.”
Japan’s average monthly wage, including overtime and bonuses, fell 0.1 percent to 274,751 yen ($2,900) from a year earlier, the Labor Ministry said in Tokyo today.
Credit is also tightening. Three-month commercial-paper rates for Japanese companies with the highest credit rankings were at 1.2 percent, compared with a 0.49 percent yield on similar-duration government bills, according to Tokyo Tanshi Co.
The drop in domestic demand echoes a sales slump in the U.S., the most profitable market for Japan’s carmakers. In October, Toyota’s sales in the world’s largest car market dropped 23 percent. Nissan’s plunged 33 percent and Honda had a 25 percent drop.
