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Japanese Car Makers Post Output Declines

November 26, 2010
2 min to read



TOKYO—Japan's top three car makers all reported drops in domestic production in October, as vehicle sales were hit by sagging demand after the government terminated a purchase incentive program early in the previous month, reported The Wall Street Journal.


Toyota Motor Corp., the world's biggest car maker by sales volume, said production in Japan fell for the second straight month following the first drop in 11 months in September.

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Japan's second and third biggest car makers, Nissan Motor Co. and Honda Motor Co., posted their first domestic output falls in 12 and 10 months, respectively.


The fact that all three car makers cut domestic production in the month was a direct consequence of the end of government purchase incentives for fuel-efficient vehicles on Sept. 8.


The sluggish domestic production data are the latest bad news for Japan's auto makers. Auto sales in Japan tumbled 23 percent industrywide in October, according to data released this month by the Japan Automobile Dealers Association.


The diminished appetite for new vehicles puts more pressure on auto makers, which are already struggling to cope with the strong yen. A high yen versus other major currencies reduces profits earned overseas when repatriated, and makes products more expensive outside Japan.


Car companies don't expect domestic sales to pick up anytime soon.

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Honda's chief operating officer for domestic sales, Hiroshi Kobayashi, cautioned last month it may take a year for domestic demand to recover in yearly terms.


Mazda Motor Corp. Chief Executive Takashi Yamanouchi also said last month his company projects domestic sales to tank 28% in the fiscal second half ending March from the preceding six months.


Toyota said domestic production totaled 237,089 vehicles in October, down 22 percent year-to-year, as domestic sales sank 25 percent to 103,672 vehicles.


Nissan logged a 12 percent fall in output to 87,215 vehicles, as domestic sales dropped 24 percent to 33,626 vehicles.


Honda said it built 80,378 vehicles in the month, down 0.8 percent, as sales at home slumped 29.2 percent to 37,745 vehicles.

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Among smaller Japanese car makers, Mitsubishi Motors Corp. was the only one to report output growth in the month. Mitsubishi's output jumped 33 percent to 61,818 vehicles due to a lower year-earlier base and solid demand for the recently launched ASX small sport-utility vehicle in Europe.


Mazda said domestic production fell 0.4 percent to 76,412 vehicles, while Suzuki Motor Corp. posted a 0.3 percent domestic production decline to 84,752 vehicles.


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