Japan Auto Sales Plunge Record 37% as Quake Deters Buyers, Shuts Factories
Toyota Motor Corp. (7203) led a record drop in Japan’s March auto sales after the nation’s biggest earthquake and ensuing nuclear crisis deterred buyers and forced automakers to shut factories.
Sales of cars, trucks and buses, excluding minicars, fell 37 percent from a year earlier to 279,389 vehicles last month, the Japan Automobile Dealers Association said in a statement today. Toyota, the world’s largest carmaker, sold 110,667 units excluding Lexus-brand cars, down 46 percent.
The magnitude-9 earthquake that struck March 11 off the coast of northeast Japan and the subsequent tsunami left more than 28,000 people dead or missing and forced Japan’s automakers to close factories due to shortages of parts and electricity. The disaster may further depress demand for autos after a government subsidy for fuel-efficient cars ended in September.
“Rough sales figures will continue until at least June,” said Satoru Takada, an analyst at TIW Inc. in Tokyo. “Consumer confidence is falling all across Japan, not only in the areas hit by the quake. Sales were on a downward trend to begin with, and the quake just made it even more difficult to predict what will happen.”
Monthly deliveries at Nissan Motor Co., Japan’s second- largest carmaker, fell 38 percent to 45,700, and sales at Honda Motor Co., the third-largest, dropped 28 percent to 43,329. The 37 percent industrywide decline was the largest for March since 1968, when the auto dealers association began collecting data.
End of Incentives
Toyota rose 0.2 percent to 3,355 yen at the 3 p.m. close of trading in Tokyo. The shares have dropped 8.1 percent since the day before the earthquake. Nissan declined 1.2 percent today, and Honda fell 2.4 percent.
Japan’s auto sales rose 11 percent last year to 3.23 million as government incentives boosted demand for fuel- efficient models. In 2011, sales may drop 13 percent to 2.8 million, according to the dealers association. For the 12 months ended March 31, vehicle sales excluding minicars fell 6.6 percent to 2.97 million, the association said.
Toyota President Akio Toyoda said today the carmaker’s earnings will be reduced as a result of disruptions from the earthquake and tsunami. He declined to say how much profit may be cut.
Toyota’s operating profit may be reduced by at least 100 billion yen ($1.2 billion) in the fiscal year ended yesterday and as much as 200 billion yen this fiscal year, said Koji Endo, an analyst at Advanced Research Japan. Any impact on production overseas will further damp earnings, he said earlier this week.
The automaker has said the company lost 140,000 units of production from March 14 to March 26, citing a shortage of electronic parts, rubber and plastics.
The carmaker resumed output of three models at two factories on March 24, prioritizing hybrids including the Prius. All 18 plants in Japan were halted until then. Toyota built 3.28 million cars in Japan in 2010.
Toyota may delay the production of at least 500,000 vehicles in Japan because of a shortage of parts and electricity after the earthquake, Endo said.
Nissan said it lost 55,000 units of production last month. The Yokohama-based carmaker is supplying its factories in Japan with some automobile components from overseas as local suppliers were affected by the earthquake and tsunami.
Tokyo-based Honda has said it will lose 46,600 units of auto production from March 14 to April 3.
Globally, automakers may give up production of 600,000 vehicles by the end of this month, and manufacturing at plants in North America may be affected when parts supplies start running out as soon as early April, Michael Robinet, vice president of Lexington, Massachusetts-based IHS Automotive, said last month.
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