2009 May Auto Sales: Toyota Down 24%, Leads Japan's Drop

Toyota Motor Corp., Japan’s largest automaker, led a 19 percent drop in the country’s vehicle sales last month, as falling wages and rising unemployment discouraged customers from visiting showrooms.

Sales of cars, trucks and buses, excluding minicars, fell to 178,503 vehicles, the Japan Automobile Dealers Association said in a statement today. Toyota sold 80,503 units excluding Lexus brand cars, down 24 percent. Honda Motor Co., the country’s second-largest automaker, posted a 4.5 percent gain, and No. 3 Nissan Motor Co. sold 9.1 percent fewer units.

Japan, the world’s second-largest economy, is struggling to spur spending among consumers as wages fell for an 11th straight month and the jobless rate reached a five-year high in April. Still, the pace of decline in auto sales slowed last month from 32 percent in March and 29 percent in April, as government tax incentives helped boost sales of Toyota Prius and Honda Insight gasoline-electric hybrid cars.

“More and more people are opting for hybrids to save money given the current economic condition,” said Ichiro Takamatsu, chief investment officer at Alphex Investments Co. in Tokyo. Rising oil prices this year will “further spur demand for cars with better fuel economy.”

Toyota has received more than 80,000 orders for the revamped Prius, it said on May 8. Honda’s Insight has attracted 35,000 orders, it said on May 21. Nissan said on May 19 that orders for 14 fuel-efficient models such as the Cube and Tiida rose about 30 percent in last month.

Unemployment

Sales of minicars, powered by engines no larger than 0.66- liters, declined 18 percent to 113,540 units last month, the Japan Mini Vehicles Association said in a separate statement. Daihatsu Motor Co., Japan’s largest minicar maker, sold 41,168 units in May, down 16 percent. Suzuki Motor Corp.’s sales fell 12 percent to 39,649 units.

Combined with minicars, industrywide sales dropped for the 10th straight month, falling 19 percent to 292,043 vehicles. Minicars represent about 40 percent of the Japanese market.

Japan’s unemployment climbed to 5 percent in April, the government said last week. Household spending fell 1.3 percent in April, the 14th straight decline. Outlays by consumers make up more than half of the economy.

Prime Minister Taro Aso plans to give subsidies for purchases of new fuel-efficient cars to spur sales as part of his 15.4 trillion yen ($162 billion) economic stimulus program. The government expects the subsidies to boost sales by 690,000 vehicles this fiscal year. Consumers who bought cars after April 10 when Aso announced the program are eligible.

The dealers association and the automakers’ group will start advertisements about the subsidies to consumers this month, Michiro Saito, a spokesman for the auto dealer’s group, told reporters in Tokyo today.

“Orders for fuel-efficient cars are increasing on the incentive program,” Saito said.

Japan’s vehicle slump mirrors that of the U.S., the world’s largest auto market, where sales have fallen 37 percent this year through April bringing General Motors Corp. to the brink of bankruptcy.