Japanese Auto Industry In The Grips Of Angst And Anxiety

Japan’s domestic car trade can look back at the first up year in seven years. Japan goes by the fiscal year, which spans from April 1 in the current year to March 31 in the next. In the 2009 fiscal, domestic sales of new vehicles rose 10 percent on the year. You think that’s an occasion to head down to your favorite Ginza hostess bar, break out the sake, or stronger stuff, and party like it’s 2003? Chigaimasu. Quite the opposite is true. The land of the rising sun is worried about falling sales. “A strong sense of anxiety continues to grip the industry,” reports The Nikkei [sub].

What’s with the onset of gloom, doom, and depression? Sales of new cars have been driven up by green car subsidies. Those subsidies are scheduled to expire by end of September. Which gives the Nipponese car business a huge case of the willies.

First of, the current growth is nothing compared to the sudden explosion caused by scrappage schemes in Europe, or, perish the thought, the unbridled growth in neighboring China. The Japanese are disappointed by their own stimulus measures.

The current “numbers are not satisfactory,” said Atsushi Kawashima, deputy chairman of Japan Automobile Dealers Association. Despite the government money, sales are still well below pre-crisis levels.

With tepid growth on the books, the approaching expiration of the subsidy program causes automotive angst. Japanese dealers predict a final hour rush in September, to be followed by cratering sales. Some Japanese dealers are worried that the sky could fall to the 2008 crisis lows.

Satoshi Aoki, chairman of the Japanese manufacturers association JAMA and of Honda predicts that new car sales will drop 4.7 percent to around 4.6 million units in fiscal 2010. At least it’s not as bad as in Germany, where February-March new car sales tumbled 30 percent year on year, five months after the end of subsidies. As they say in Deutschland: “Hochmut kommt vor dem Fall.” The higher they rise, the deeper they fall. So Japan, not much up, not much down, ne?