Japan’s Auto Parts Industries Association (JAPIA) says it remains “quite cautious” concerning prospects for the sector as current and expected sales tax hikes in the country kick in.
JAPIA, which numbers 82 of its 446 members as listed companies on the Tokyo Stock Exchange, cited recent figures showing a 6.9% fall in monthly car production figures to 597,000.
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“Global production is 1.92m, this is +8%, so that means domestic production is going down,” JAPIA vice chairman executive managing director, Takehide Takahashi, told just-auto at the Paris Motor Show.
“It is very hard to determine [why] because there are so many factors involved. For example, we have the tax hike in April. In comparison with last year, we are not sure if we are comparing a normal year for some ‘rushing around.’
“Furthermore, several economic indicators show wide contradictions. The Bank of Japan survey said the economy is gradually going well [but] consumption, especially supermarket consumption, is dropping.
“We are quite cautious about how the economics will go.”
Some reports indicate the Japanese government is using the sales tax hikes to address national debt, while it does now appear the country is emerging from a sustained period of deflation and stagflation.
“We are expecting a further excise tax in October next year,” said Takahashi. “If the government decides to do something [it], says it depends on how the economy is going.
“This year, we have had the excise tax raised from 5% to 8% and sales of cars are gradually decreasing.”
The JAPIA chief, who also met US and European bodies, CLEPA and OESA, in Paris, revealed the Tokyo-based association was particularly keen on seeing the Transatlantic Trade and Investment Partnership (TTIP) enacted, potentially creating what could be the world’s largest free trade zone and saving billions of dollars.
“Concerning TTIP, we are quite eager the agreement will come,” said Takahashi. “Other countries like Korea are now benefiting – we are handicapped without TTIP.”
