Deflation is plaguing the entire country with the exception of the city of Nagoya, which is enjoying higher consumer spending and lower unemployment.

The reason is that Toyota Motor Corp. and other prosperous manufacturers are in the neighborhood.

Other contributing factors include the area’s peculiar spirit of keeping a steady livelihood and prioritizing families, analysts said.

A new vehicle shop in Meito Ward is always thronged with 200 to 300 families on weekends. Most of them want to buy minivans and other leisure vehicles.

Half the customers buy vehicles with cash, and there are many grandfathers who buy an additional vehicle for their grandsons, salesmen said.

Last year, about 150,000 leisure vehicles were sold in Tokyo and 130,000 in Osaka, while some 190,000 were sold in Nagoya — up 10.1 percent over last year compared with increases of 3.8 percent in Tokyo and 3 percent in Osaka.

Brand commodities are no exception. In a shop selling high-quality European leather goods in the Sakae shopping district, a mother and daughter bought a bag priced at about 100,000 yen only five minutes after spotting it.

In Sakae, there are many American- and European-affiliated brand shops, including Tiffany’s, and women with shopping bags adorned with the logos of these shops in their arms are a common sight.

The shops do not disclose their sales, but a researcher at a think tank said, “Sales at department stores in Nagoya last year were twice as large as those in Tokyo and Osaka.”

In Nagoya, families with three generations living together account for 6.4 percent of the total, twice as many as in Tokyo and Osaka.

Toshihiro Uchida, a researcher at UFJ Research Institute, said there are many three-generation households, and that since they have their own land and houses, they feel no uneasiness over their future, leading them to buy high-priced goods.

“Because of a higher rate of people owning houses (in Nagoya) than in other areas, people here have fewer mortgages and a lot of savings,” said an official at the Nagoya branch of the Bank of Japan. “Thus, their family budgets are unaffected by the sluggish economy.”

The official said pure outstanding savings — the amount of savings minus debts — total 13.46 million yen in a Nagoya family, 1.95 million yen more than a family in other areas.

Uchida said the incomes of Nagoya families are stable because of Toyota, which is based in Aichi Prefecture, whose capital is Nagoya. The carmaker’s consolidated pretax profits in the business year that ended in March hit an all-time high of 1.4 trillion yen.

In this spring’s labor negotiations, about 66,000 Toyota employees received the full amount of bonuses they had demanded, and 80 percent to 90 percent of them live in Aichi Prefecture.

Most of the Toyota group’s enterprises, whose business performances are also favorable, are located in Aichi.

Corporate bankruptcies are small, as 57 firms went bust with liabilities of more than 1 billion yen, and the employment situation in the prefecture is stable. The jobless rate in Aichi last year was 4 percent, compared with the national average of 5.4 percent.

The analysts said the region is buoyed by money flowing into Nagoya due to the excellent technologies of Toyota and other manufacturers.

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