Figures released by the Japanese auto dealers' association (JADA) shows that Japan's car market decline continued in March.

Car sales for vehicles over 660cc (ie excluding midget cars) were down 14.6% in March at 356,412 units. For the first quarter as a whole the decline was 17% with sales at 813,612 units.

The data comes as fears are growing over the short-term outlook for the Japanese economy. A key Japanese central bank business survey has shown that big companies plan to cut spending this year, clouding the outlook for Prime Minister Shinzo Abe's drive to stimulate the economy.

Earlies this month Japanese carmakers' trade association JAMA said that car sales in Japan are heading for further decline. It says that auto sales in Japan are expected to drop by more than 5% in the next fiscal year starting in April.

Demand for vehicles excluding 660cc minicars is not expected to pick up from this year's estimated sales around 3.1m vehicles, while minicars will likely drop 12% to 1.9m units, JAMA said.

Minicar sales in Japan were boosted this year ahead of tax increases, but the tax increases will apply in the next fiscal year.

JAMA's sales forecast follows larger pay rises for carmakers' employees, encouraged as part of the government's efforts to stimulate domestic consumer spending.

Despite sluggish demand at home, Japanese automakers are enjoying record profits boosted by the impact of the weaker yen on overseas earnings.