Outlook Brighter for Japan in 2012, Group Says

The Japan Automobile Manufacturers Assn. is confident the worst is over and better times are due this year.

In a Feb. 1 communiqué, the group, representing 14 Japanese car, commercial-vehicle and motorcycle builders, is forecasting a sharp turnaround in 2012. Total demand for cars and CVs is expected to rise 19.1% to 5.02 million units, after declining 15.1% in 2011 to 4.21 million units.

The earthquake and tsunami last March in Japan and severe flooding in Thailand later in the year crippled the industry’s supply chain.

Market supply did not normalize until the beginning of autumn, “enabling the delivery of backlogged orders and a subsequent shift to more robust sales, supported by the launch of new and revamped models,” JAMA says.

The European credit crisis, the impact of yen appreciation and other factors are affecting the outlook for 2012.

But the manufacturers’ organization believes these will be offset in part by a recovery in domestic demand, boosted by reductions in the national automobile tonnage tax, plus tax incentives and subsidies for the purchase of “eco-friendly” fuel-efficient vehicles.

However, long term, with a population aging and a younger generation relatively indifferent to car ownership, the gradual decline from record vehicle sales of 7.77 million in 1990 is expected to continue.