The auto industry must take the initiative to be more competitive until the benefits of Prime Minister Shinzo Abe’s deflation-busting economic policies are fully felt, according to Akio Toyoda, chairman of the Japan Automobile Manufacturers Association.
“In a word, the industry (as a whole) needs to increase further competitiveness” to take advantage of Abe’s aggressive economic plan, dubbed “Abenomics,” Toyoda said in a recent group interview. “It all depends on strengthening global competitiveness while maintaining the competitive edge of domestic production and development bases.”
Abe is advocating radical monetary easing, public works spending and growth strategies to encourage private investment.
His policies have helped the domestic auto industry enjoy moderate growth in recent months. According to data announced by eight major Japanese automakers, their combined production in November rose to 800,567 units, up 10.5 percent from last year, and the third consecutive month of expansion. Overseas production increased 16.4 percent to 1,493,465 units.
Toyota Motor Corp. is expected to be the first carmaker in the world to manufacture 10 million vehicles in a year, according to its data through November. The automaker’s output stood at 9,337,668 vehicles, up 0.9 percent from the same period the previous year.
Toyoda, also president of Toyota Motor, said suppliers stand to benefit.
“For example at Toyota, 75 percent of components (for a car) come from outside suppliers. So if we have sales of some trillions yen, 75 percent of that would be paid (to them),” Toyoda said.
As for the domestic outlook in 2014, Toyoda said a drop in sales is unavoidable considering the negative impact on consumption of the planned sales tax increase. The 5 percent tax will be raised to 8 percent in April.
“I think it’s inevitable to expect a certain level of drop” after many rush to buy cars before the scheduled tax hike. “Each company is now working on estimating the scale (of the drop),” he said.