Domestic sales of automobiles, including minivehicles, are likely to shrink by 0.7 percent in 2002 to 5.88 million vehicles for the second straight year of decline, an industry group said Thursday.

Sales are expected to drop this year by the same margin to 5.92 million vehicles, the Japan Automobile Manufacturers Association said.

"It is regrettable that automakers failed to spur demand this year despite the launch of a number of new models in the market," said Hiroshi Okuda, chairman of the association as well as of Toyota Motor Corp.