Asian Cars Struggling In Japan

Asian Cars Struggling In Japan by Jenny McLane

Same with the struggle in the American auto market, the Japanese automotive industry is also plagued by sales doldrums. In Japan, sales of cars and trucks fell during the month of April and this is going to be the 22nd month in a row. The decline is pointed to the maturing population and culture changes.

Asian cars, like Detroit automakers, lost another hefty slice of the auto market. Oddly, so did the Asian car manufacturers. The rising fuel prices and the worries about auto economy sapped purchasers' vehicle demand. But the weakness in the sales in the United States is nothing compared with the hardships Asian automakers face in Japan.

In the Japanese fiscal year ending on March 31, sales of cars and trucks, excluding mini cars, decreased to 3.59 million units. In 29 years, the figure is the lowest annual total. The main reasons for the collapse of the Japanese auto market are demographic. Experts said that Japan's population is grayer than most, and it has started to shrink.

The Nissan Motor Co., previously marketing vehicles under the Datsun name, is also affected by the doldrums. "We're pessimistic about the market," said Nissan spokesman Simon Sproule. "People just aren't buying cars."

The Honda Motor Co., a Japanese engine manufacturing and engineering corporation, also is not an exception. Changes in the culture have also lessened auto demand. Japanese now keep their cars longer, and young Japanese are less inclined than their parents were to buy an expensive car to demonstrate that they've "made it," said David Iida, a spokesman for the Honda Motor Co. "There's been a change in the mentality."

In the Japanese territory, Detroit's automakers barely compete. As a fact, General Motors Corp. earlier sold its stakes in Japanese automakers. However, the current plight affects the auto giant directly. Analysts in the industry have this to say: "If the Japanese had better growth prospects at home, they might not be pursuing American customers as doggedly as they are."

The Toyota Motor Corp., the fast rising Japanese multinational corporation, has yet no power to repel sales doldrums. The Japanese automaker has probably invested more in the new Tundra pickup than in any other single vehicle, although the vehicle will be sold only in the North American market.

An analyst added, "Japanese auto giants are also expanding in Latin America and southeast Asia, but they will continue to rely on the U.S. market for the bulk of their profits." In the previous years, North America's auto earnings have accounted for 50 to 60 percent of their total profits. To remedy the deluge in auto sales, Japanese automakers are also competing more aggressively in Europe and this is a trend likely to pile more pressure on GM's and Ford Motor Co.'s European operations.

There is little in the sales numbers to suggest any improvement in the near future in Japan. Car and truck sales decreased 10.2 percent in April to 217,911 units - the second consecutive double-digit monthly dip. Even sales of minivehicles, one of the few profitable segments in the market, plummeted in April for the first time in over a year. Sales of minis, those with engines no larger than 660 cc, dipped at 6.4 percent at 139,779 units.

As the Japanese look to make up sales abroad, the currency is lending a temporary boost. Yen's weakness against the dollar and the euro, by far, is temporarily helping the economy. Deutsche Bank analyst Gaetan Toulemonde estimates that of Japan's four million vehicle exports, 1.7 million are headed to North America and one million to Europe.

The automotive industry is plagued by so many fluctuations. Gas price fluctuations seem to become constant. Auto parts like Monroe shocks do not fall on the exceptions. So are vehicle prices. This is why automakers are doing every clever thing to circumvent the ill-fated occurrences in the industry.