’07 vehicle sales lowest in 35 years

Compiled From Bloomberg, Kyodo

Vehicle sales in Japan fell in 2007 to their lowest level in 35 years as declining wages, high fuel costs and a shrinking population cut demand for automobiles, an industry association said Monday.

Sales of cars, trucks and buses excluding minicars dropped 7.6 percent to 3.43 million from 3.72 million in 2006, the Japan Automobile Dealers Association said.

Toyota saw a 6.2 percent decline in domestic sales to 1.58 million — falling below the 1.6 million unit line for the first time in 24 years. Nissan, Honda and Mazda also suffered year-on-year falls in sales.

Car sales fell 5.8 percent to 2.95 million units, while truck sales fell 17.6 percent to 465,019 and bus sales were down 11.3 percent at 15,617 units.

Despite their brisk overseas sales, the automakers continue to battle sluggish sales at home, where young people are becoming less interested in buying cars. Surging fuel prices have also dented consumer demand.

“The 2007 sales represent a decline of more than 2.5 million from the peak year of 1990. This is a very serious situation,” an association spokesman said.

Toyota Chairman Fujio Cho, speaking to reporters in Tokyo, said it would be difficult to see a recovery in vehicle sales this year, noting that Japan has become a “mature car market.” Cho is also chairman of the Japan Automobile Manufacturers Association.

Vehicle sales excluding minicars fell every month in 2007 except in October and November. New or redesigned models such as Toyota’s Mark X Zio minivan and Honda’s Fit hatchback failed to halt the slump.

“Sales spikes from new models don’t last as long as they used to,” said Yoko Yoshimura, an auto analyst at Global Insight Inc. “People’s motivation to buy cars is becoming thinner and thinner.”

Wages in Japan fell in 10 of the first 11 months of 2007, and winter bonuses, which typically account for 10 percent of annual income, declined 9.7 percent.

Japan is the world’s third-largest vehicle market, after the United States and China. Vehicle sales in the U.S. declined 2.5 percent to 16.1 million, a nine-year low.

Sales of minicars, powered by engines no larger than 660cc, fell 5.1 percent last year to 1.92 million units from a record 2.02 million a year earlier, according to the Japan Mini Vehicles Association.

Sales at Daihatsu, Japan’s largest minicar maker, rose 2.3 percent to 615,159. Suzuki, the second-largest minivehicle maker, sold 591,391 units, down 3.3 percent.