Sales of cars, trucks and buses fell 28 percent to 174,281 vehicles in January, excluding minicars, the Tokyo-based Japan Automobile Dealers Association said in a statement today. It was the biggest monthly drop since May 1974, the group said.
Honda slashed its full-year profit forecast 57 percent on Friday as sales plunge in Japan, the U.S. and Europe. Japan is headed for its worst postwar recession as factory output slumped an unprecedented 9.6 percent in December and unemployment surged.
“Since this autumn, the very bleak economic climate has replaced high gasoline prices as the biggest reason” for the drop in car sales, said Mitsuru Kurokawa, senior market analyst in Tokyo at consulting company IHS Global Insight. “We won’t hit bottom until the second half of this year.”
Toyota, the world’s largest carmaker, sold 81,985 vehicles excluding its Lexus brand, down 22 percent, and sales at Honda dropped 31 percent to 22,087 units. Sales at Nissan Motor Co., Japan’s third-largest automaker, fell 31 percent to 30,786 vehicles last month.
Toyota shares lost 1.4 percent to close at 2,885 yen in Tokyo. Nissan fell 2.9 percent and Honda declined 1 percent.
Rising Unemployment
Some 400,000 non-regular workers will be out of jobs by the end of March, the Japan Manufacturing Outsourcing Association reported last week, which was about five times more than a December estimate by the Labor Ministry. Japan’s unemployment rate rose in December to 4.4 percent from 3.9 percent in November, the statistics bureau said on Friday.
NEC Corp., Japan’s largest personal-computer maker, said on Friday it will eliminate more than 20,000 employees in the largest job cut in Japan since the world went into recession. Hitachi Ltd., the world’s third-largest maker of hard disk drives said it plans to cut about 7,000 jobs from its automotive system and electronics operations by the end of March 2010.
Wage Subsidies
+ Dec.2008 Auto Sales: GM,Ford,Honda,Toyota Drag 36% decline
+ Dec.2008 Auto Sales: GM U.S. Sales Drop 31%
+ Dec.2008 Auto Sales: Honda U.S. Drop 34.7%
Japan’s Ministry of Health, Labour and Welfare is requesting a ten-fold increase to 58 billion yen in next fiscal year’s budget for wage subsidies to carmakers and other manufacturers as the recession forces production cuts.
Japan, the world’s second-largest economy, created the subsidy program in 1975 to help pay salaries at companies prompted to rapidly scale back production due to economic declines.
The drop in domestic demand echoes a sales slump in the U.S., the most profitable market for Japan’s carmakers. In December, Toyota’s sales in the world’s largest car market dropped 37 percent. Nissan’s plunged 31 percent and Honda had a 35 percent drop.
U.S. auto sales figures, expected to fall a 14th straight month, will be announced tomorrow.
