Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Japan’s Carmakers Downsize Tokyo Show as Market Offers No Haven

Japan’s Carmakers Downsize Tokyo Show
Toyota Motor Corp.'s Aqua hybrid vehicle. Photographer: Kiyoshi Ota/Bloomberg

Japanese automakers will compete for a dwindling number of local buyers at this week’s Tokyo Motor Show as the domestic market fails to provide a haven from a strong yen that’s eroding profits from overseas sales.

Toyota Motor Corp. and Honda Motor Co. will unveil fuel-efficient cars targeting cost-conscious consumers at the event, whose press days start tomorrow. After 24 years at Japan’s largest exhibition hall in neighboring Chiba prefecture, the carmakers have moved to a smaller venue in central Tokyo.

Formerly one of the world’s five biggest car shows, Tokyo has been eclipsed in recent years by Beijing and Shanghai, which alternate in hosting the top annual exhibition in China, the world’s largest auto market. An estimated 800,000 people will attend the event in Japan’s capital, compared with 1.5 million visitors in 2005, according to the organizers.

“The Japanese market has become too small,” said Toshiyuki Shiga, chairman of the Japan Automobile Manufacturers Association. “In order to avoid a hollowing out of the Japanese automobile industry, we need domestic sales to grow.”

Japan’s economic recovery from the March 11 earthquake has slowed as the yen traded near a record high against the dollar, eroding profits of exporters. Overseas shipments in October slid the most since May, while consumer confidence has failed to recover to pre-disaster levels, government data show.

Cheaper Model

Toyota will introduce the Aqua, its smallest hybrid vehicle, to tap demand among younger consumers seeking a fuel-efficient entry-level car. It will likely be sold from 1.69 million yen ($21,800), according to Yoshiaki Kawano, an analyst at industry researcher IHS Automotive. The 3.9-meter-long compact will be marketed as the Prius C outside of Japan, expanding the lineup of the world’s best-selling hybrid.

“The Aqua shows that Toyota is raising its efforts to boost sales in its domestic market,” said Mamoru Kato, an auto analyst at Tokai Tokyo Research Center in Nagoya, Japan. “With the Aqua meeting demand for smaller, cheaper hybrids, Toyota can safely raise the price of the Prius to a more profitable level.”

The Toyota City, Japan-based automaker, which followed Honda in scrapping full-year profit forecasts after floods in Thailand disrupted production, will also show a plug-in version of its Prius hybrid and the new 86 sports car, which the automaker previewed on Sunday.

Electric Vehicles

Honda, based in Tokyo, will introduce three models at the show, including its first plug-in hybrid, the AC-X sedan, and an electric sports car. Nissan Motor Co., the maker of the all-electric Leaf car, will display three electric vehicles: the Pivo3 compact, the ESFLOW sports car, and the Townpod compact. Mazda Motor Corp., based in Hiroshima, Japan, will introduce the diesel-powered CX-5 crossover sport-utility vehicle.

Among European carmakers, Audi AG will show its new A6 hybrid, the S5 Sportback and five other models. Daimler AG’s Mercedes-Benz will display 19 models. Imported cars made up 4 percent of vehicle sales in Japan last year, according to auto association figures.

“People have become more cautious about buying new cars after the earthquake,” Takeshi Miyao, a Tokyo-based analyst at industry researcher Carnorama, said in an interview. “The trend in recent years has been smaller, fuel-efficient cars, reflecting in part the weak economy.”

Bolstering domestic vehicle sales takes on added significance for Japanese automakers as the appreciation in the yen slashes the profitability and competitiveness of exports and threatens local manufacturing jobs.

Yen Impact

The yen, which reached a post-World War II record last month, has gained more than 10 percent in the past six months, the best performance among 10 developed-nation peers, according to data compiled by Bloomberg.

The currency moves have slashed Japanese automakers’ profit by a combined 330 billion yen in the first half, according to Japan’s automakers group. Toyota President Akio Toyoda warned this month that the country’s automobile industry faces a collapse with the continued strength in the yen, which reduces the value of repatriated earnings.

Domestic vehicle sales are forecast to drop 14 percent to 4.25 million this year, compared with 7.77 million at the industry’s peak in 1990, according to the auto association. Deliveries have declined annually since 2004 apart from last year, when government subsidies for fuel-efficient cars led to a rebound.

“There are 5.32 million people who work in the auto industry,” Shiga, who is also Nissan’s chief operating officer, said Nov. 7. “These jobs will be directly affected by a hollowing out.”

The 42nd Tokyo Motor Show opens to the public at the Tokyo Big Sight from Dec. 3 to Dec. 11.

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.