Toyota will cut its daily vehicle output in Japan by 15% in April as demand for new cars drops in the country following the increase in a national sales tax.
The increase, up from 5% to 8% from 1 April, is expected to lead to an increase in consumer spending before it comes into effect, followed by a temporary slump in sales.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
The tax increase is aimed at reining in Japan’s huge public debt even at the risk of slowing the economy in the short term. Although Toyota does not publish production plans, the Reuters news agency learned the carmaker intends to manufacture around 12,200 vehicles a day in April, down 15% from a year ago.
Toyota said last week it would trim full-year production in Japan this year by 6% to 3.15m vehicles.
The tax increase, which will help pay for rising health care costs, has prompted consumers to bring forward purchases of expensive luxury items.
