Demand for vehicles in Japan is expected to rise a mild 0.9% next fiscal year, reflecting the saturated domestic market and a slow recovery in the Japanese economy, an industry body said on Thursday.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
Dow Jones said that, although it’s a low figure, if growth does reach that forecast, it will be the highest since fiscal 2000.
The report said that the Japan Automobile Manufacturers Association (JAMA) expects domestic demand for trucks, buses and passenger and mini vehicles to rise to 5.92 million vehicles next fiscal year, which starts April 1, from an estimated 5.87 million this fiscal year.
Annual domestic vehicle demand has remained around 6.0 million vehicles since fiscal 1997, Dow Jones noted.
The report said the forecast growth next year would also mark the first time since the period ended March 1997 that vehicle demand has risen for three years in a row. Back then, annual demand increased in a range of 3.0%-5.7%.
For the fiscal year ending this month, JAMA reportedly estimates demand rose 0.1%, after growing 0.8% last year.
Due to expected dull domestic growth, Japanese carmakers are focusing on overseas markets to boost profits, Dow Jones said, noting that Toyota, Honda and some other manufacturers have been posting strong profit growth in North America.
JAMA reportedly said although it forecasts domestic economic growth of 2% next fiscal year, it expects consumption to recover only slowly due to likely heavier tax and pension costs. Japan’s exports are expected to continue to grow on the back of strength in the US economy, and corporate capital spending is expected to remain relatively solid, though the pace may slow, JAMA said, according to Dow Jones.
The association reportedly expects demand for passenger cars, including mini-cars with engine capacity of 660 cubic centimetres, to rise 2.5% next fiscal year after an estimated fall of 3.0% this year.
It forecasts demand for trucks to fall 5.7% next fiscal year after an estimated jump of 15.1%, Dow Jones added. Similarly, JAMA expects demand for buses to drop 13.6% after an estimated leap of 29.4% this year. Demand for trucks and buses grew this fiscal year as tougher exhaust emission regulations were introduced in some major cities late last year, the report noted.
