Slumping vehicle sales hit employment in Japan's auto sector

Slumping vehicle sales are starting to take a toll on the employment situation in the automotive industry.

Since Nov. 8, Mazda Motor Corp. has stopped soliciting new workers on fixed-term contracts at its head office plants in Hiroshima Prefecture, which mainly manufacture finished vehicles, and the Hofu plant in neighboring Yamaguchi. Honda Motor Co. has also suspended recruitment of workers on similar terms at its Yorii plant in Saitama, which produces SUVs and sedans.

Both firms have no idea when they will restart hiring of the so-called fixed-term workers. Employment conditions for such staff tend to be affected easily by fluctuations in economic conditions.

The hiring adjustments come on the heels of stagnant factory operating rates, amid faltering sales not only in domestic markets but also in major overseas markets such as the United States and China.

Sales of new automobiles in Japan tumbled 24.9 percent in October from a year before, the first decline in four months, due to the effects of Typhoon Hagibis — which hit that month — and the consumption tax hike from 8 percent to 10 percent on Oct. 1.

Concerned about growing uncertainty about the course of the world economy, six of the seven major automakers in Japan have lowered their global automobile sales estimates for fiscal 2019.

In addition to Mazda and Honda, Nissan Motor Co. announced in July that it did not plan to renew the contracts of more than 880 existing fixed-term workers at its plants in Tochigi and Fukuoka prefectures. The move was said to be aimed at bolstering the firm’s financial resilience. Auto parts maker Aisin AW Co., an affiliate of Toyota Motor Corp., has halted its hiring of such workers.

Mitsubishi Motors Corp., whose earnings are slumping, plans to reduce back-office workers.