Japan’s Domestic Revival - New models hope to revive soft automotive market

Japan’s domestic new-car sales continued their slide in the April-June quarter. Still, some analysts and industry executives say the worst could be over.

“With July as the turning point and the product cycle acting as the driver, it looks as though we can expect domestic sales gradually to bottom out,” JPMorgan auto analyst Takaki Nakanishi wrote in a report.

A string of new or redesigned model introductions, especially from Toyota Motor Corp., leading up to October’s Tokyo auto show should stimulate demand, Nakanishi wrote.

One launch a month

Toyota is expected to unveil one new or redesigned car a month for the rest of this year, according to the Nikkei newspaper. It will launch the redesigned ist this month. It began selling the redesigned Noah and Voxy minivans June 27.

Other automakers are doing likewise. On July 5, Mazda Motor Corp. launched the redesigned Demio, known as the Mazda2 overseas, its top-selling model in Japan.

Toyota President Katsuaki Watanabe, speaking at the Voxy and Noah launch, reaffirmed Toyota’s forecast for Japan sales this year of about 1.72 million Toyota and Lexus vehicles, a rise of 2.0 percent over 2006 sales.

In contrast with Toyota’s rosy forecast, the Japan Automobile Manufacturers Association sees total industry volume

dropping 1.9 percent in 2007 to 5.63 million. It mainly blames weak commercial truck sales. That total would be down 28 percent from the record of 7.78 million in 1990.

Minis top Toyota

In the second quarter, sales of Toyota and Lexus vehicles combined dropped 10.7 percent to 343,500. That put Toyota’s market share behind that of 660cc minicars, whose sales slipped 5.2 percent to 453,468. Minicars have held up comparatively well, as consumers have shifted to the economical vehicles. Six of the quarter’s 10 best-selling models were minicars.

Total light-vehicle sales in the second quarter fell 7.9 percent to 1,175,887.

Sales of all vehicles were even worse, dropping 8.2 percent to 1,197,329. Sales of medium- and heavy-duty trucks were particularly weak, tumbling 23.2 percent to 18,095.

Suzuki Motor Corp.’s sales fell a modest 4.0 percent to 158,001 in the second quarter. Suzuki thus took second place in the sales ranking, ahead of Nissan Motor Co. and Honda Motor Co.

Nissan’s sales also did relatively well, dropping only 6.3 percent to 150,883. Honda’s slid 11.4 percent to 148,149.

Imports held their ground, slipping a mere 1.9 percent to 63,943 in the second quarter. But DaimlerChrysler’s sales fell 23.3 percent, as sales of Mercedes-brand cars dropped 23.5 percent.