Japan's production of cars, trucks and buses marked its steepest drop in at least four decades in November, an industry group said Thursday, as the fallout from the U.S. slowdown crimped auto demand.
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Symbol Price Change
HMC 19.73 -0.26
TM 61.08 +0.71
{"s" : "hmc,tm","k" : "c10,l10,p20,t10","o" : "","j" : ""} Vehicle production in Japan, home to Toyota Motor Corp. and other major automakers, plunged 20.4 percent in November compared to the same month a year ago to 854,171 vehicles, the Japan Automobile Manufacturers Association said.
That marked the second straight month of on-year declines and the percentage slide was the biggest since the group began compiling such data in 1967, it said.
Production of passenger cars in Japan decreased 20.3 percent in November from the previous year to 737,797 vehicles, while production of trucks here declined 20.9 percent for the month to 106,170.
Japanese automakers, which also include Honda Motor Co., Nissan Motor Co. and several other manufacturers, have been hammered by the dwindling of demand in the U.S., the world's biggest auto market.
But signs are growing the fallout is so serious domestic sales are getting drastically damaged as well.
Auto executives have expressed dismay at the fall in Japanese sales, which have worsened in the last two months.
Japanese plants are being idled to reduce production, and thousands of assembly line workers have lost their jobs in recent weeks.
"Even if we are doing our utmost, the global crisis is coming at us like a tidal wave," Teruyuki Minoura, president of Daihatsu Motor Co., a Toyota affiliate, told reporters Thursday.
Earlier this month, the Japan Automobile Manufacturers Association said it expected demand in Japan will dive next year to its lowest in about three decades.
Sales of new autos are expected to stand at 4.86 million in 2009, down 4.9 percent from what it's projecting for this year at 5.11 million, the group said.
New vehicle sales in Japan have never dipped below the 5 million mark since 1980. They reached 7.78 million in 1990, during this nation's heyday "bubble" economy.
Vehicle sales in Japan stood at about 5.02 million in 1980, and at 4.31 million in 1975.
Toyota Executive Vice President Akio Toyoda apologized for the public concern that Japan's top automaker has set off by forecasting its first operating loss in seven decades for the fiscal year ending March 2009.
"The overall world economy is said to be facing its worst crisis in 100 years," he told reporters.
But Toyoda brushed off questions about a recent Japanese media report that he may be promoted to president soon, and instead insisted on talking about a new car he said he hoped would appeal to women.
"This car is for housewives, moms and women. In hard times like these, it's best if women are full of life and happiness," he said.
Related Quotes
Symbol Price Change
HMC 19.73 -0.26
TM 61.08 +0.71
{"s" : "hmc,tm","k" : "c10,l10,p20,t10","o" : "","j" : ""} Vehicle production in Japan, home to Toyota Motor Corp. and other major automakers, plunged 20.4 percent in November compared to the same month a year ago to 854,171 vehicles, the Japan Automobile Manufacturers Association said.
That marked the second straight month of on-year declines and the percentage slide was the biggest since the group began compiling such data in 1967, it said.
Production of passenger cars in Japan decreased 20.3 percent in November from the previous year to 737,797 vehicles, while production of trucks here declined 20.9 percent for the month to 106,170.
Japanese automakers, which also include Honda Motor Co., Nissan Motor Co. and several other manufacturers, have been hammered by the dwindling of demand in the U.S., the world's biggest auto market.
But signs are growing the fallout is so serious domestic sales are getting drastically damaged as well.
Auto executives have expressed dismay at the fall in Japanese sales, which have worsened in the last two months.
Japanese plants are being idled to reduce production, and thousands of assembly line workers have lost their jobs in recent weeks.
"Even if we are doing our utmost, the global crisis is coming at us like a tidal wave," Teruyuki Minoura, president of Daihatsu Motor Co., a Toyota affiliate, told reporters Thursday.
Earlier this month, the Japan Automobile Manufacturers Association said it expected demand in Japan will dive next year to its lowest in about three decades.
Sales of new autos are expected to stand at 4.86 million in 2009, down 4.9 percent from what it's projecting for this year at 5.11 million, the group said.
New vehicle sales in Japan have never dipped below the 5 million mark since 1980. They reached 7.78 million in 1990, during this nation's heyday "bubble" economy.
Vehicle sales in Japan stood at about 5.02 million in 1980, and at 4.31 million in 1975.
Toyota Executive Vice President Akio Toyoda apologized for the public concern that Japan's top automaker has set off by forecasting its first operating loss in seven decades for the fiscal year ending March 2009.
"The overall world economy is said to be facing its worst crisis in 100 years," he told reporters.
But Toyoda brushed off questions about a recent Japanese media report that he may be promoted to president soon, and instead insisted on talking about a new car he said he hoped would appeal to women.
"This car is for housewives, moms and women. In hard times like these, it's best if women are full of life and happiness," he said.
25/12 2008 23:23 le 0
710 biler indien - No more stocks, please!
dec 24, 2008, 0:09 IST
Unprecedented fall in sales has resulted in build-up of huge
inventories, and dealers are pleading with car makers...
The sudden and sharp fall in sales has put car dealers in a spot.
They are straddled with huge inventories and are pleading with
manufacturers not to dump any more stock on them. Two have already
downed shutters in Mumbai – one in Prabhadevi and the other in
Andheri. Some have curtailed operations and let out some space to
others.
In the last three months, hardly any new dealership has come up
anywhere in the country. When sales were booming, it was not unusual
to see up to 25 new outlets per month. Till not so long ago, it was
common to find dealers in a queue in front of car companies, waiting
for dealerships. The same companies have now been forced to advertise
for dealerships.
Carnation, a venture floated by former Maruti Udyog Managing Director
Jagdish Khattar, reckons that at least 250 dealerships face rough
weather and could shut shop. All told, there are over 2,000 car
dealerships in the country. "Numerous car dealers have approached us
either for joint venture partnership or outright takeover of their
dealership," said Khattar.
Car sales turned negative for the first time in the current fiscal in
the month of July. Sales for the month of November fell a whopping
23.71 per cent, the steepest drop in the last 8 years. December is
expected to be no better as potential buyers can get a 2009 model by
waiting for a month. Almost 75 per cent of cars in the country are
brought on credit. With liquidity on a tight leash, jobs market in
the decline and the stock markets volatile, consumers have begun to
put off purchases.
Most dealers Business Standard spoke to did not wish to be quoted –
any admission of business conditions turning adverse could drive
customers further away. All of them are closely held, so their
accounts are not in the public domain. Privately, most admitted
things look distinctly uncertain in the near future. "Times are bad.
But the current slowdown will reverse once the Nano is launched. Then
the crowds will follow," said an executive of Sanya Automobiles, a
Tata Motors dealership.
Top dealers, who sold over 400 cars a month, are now finding it
difficult to sell more than 250 or 300. As a result, inventories are
up from 15 days to almost two months in some cases now. "You cannot
borrow at anything less than 17-18 per cent. If you hold the stock
for two months, it wipes the entire commission of 2.5-3.5 per cent
given by the car maker," says Federation of Automobile Dealers'
Associations Secretary General Gulshan Ahuja.
To be sure, dealers also make money from service of vehicles and sale
of accessories. Industry estimates suggest that in some cases as much
as 70 per cent of their turnover comes from allied businesses.
Maruti Suzuki, the country's largest car maker, has built several
revenue streams like insurance, spares etc which its 600 dealerships
across the country can tap. "Our dealers also benefit the True Value
sale and purchase of second-hand vehicles. Also, about 50 of our car
dealers also operate driving schools in association with the company.
These additional revenue streams sustain our dealers during the
current slowdown," said a company official.
Some sector experts pointed out that though these businesses provide
a significant buffer against a slowdown in car sales, these too are
linked to car sales and are expected to dip sooner than later. To get
over the situation, dealers are lobbying hard with car companies not
to send them new stocks. Some others want to look at other
options. "With shrinking margins, most car dealers feel their
property could fetch better yields if they turned it, for instance,
into a shopping mall or an office complex," said All India Car
Dealers' Association General Secretary DS Gill.
Clearly, the boys are being separated from the men and only those
with enough financial firepower will survive the slowdown. "During
the boom time which lasted the last 5 years car dealers made good
profits. It's these profits that are helping car dealers to ride the
current difficult phase. Established cars dealers are holding out,"
Toyota Kirloskar MD (marketing) Sandeep Singh said.
dec 24, 2008, 0:09 IST
Unprecedented fall in sales has resulted in build-up of huge
inventories, and dealers are pleading with car makers...
The sudden and sharp fall in sales has put car dealers in a spot.
They are straddled with huge inventories and are pleading with
manufacturers not to dump any more stock on them. Two have already
downed shutters in Mumbai – one in Prabhadevi and the other in
Andheri. Some have curtailed operations and let out some space to
others.
In the last three months, hardly any new dealership has come up
anywhere in the country. When sales were booming, it was not unusual
to see up to 25 new outlets per month. Till not so long ago, it was
common to find dealers in a queue in front of car companies, waiting
for dealerships. The same companies have now been forced to advertise
for dealerships.
Carnation, a venture floated by former Maruti Udyog Managing Director
Jagdish Khattar, reckons that at least 250 dealerships face rough
weather and could shut shop. All told, there are over 2,000 car
dealerships in the country. "Numerous car dealers have approached us
either for joint venture partnership or outright takeover of their
dealership," said Khattar.
Car sales turned negative for the first time in the current fiscal in
the month of July. Sales for the month of November fell a whopping
23.71 per cent, the steepest drop in the last 8 years. December is
expected to be no better as potential buyers can get a 2009 model by
waiting for a month. Almost 75 per cent of cars in the country are
brought on credit. With liquidity on a tight leash, jobs market in
the decline and the stock markets volatile, consumers have begun to
put off purchases.
Most dealers Business Standard spoke to did not wish to be quoted –
any admission of business conditions turning adverse could drive
customers further away. All of them are closely held, so their
accounts are not in the public domain. Privately, most admitted
things look distinctly uncertain in the near future. "Times are bad.
But the current slowdown will reverse once the Nano is launched. Then
the crowds will follow," said an executive of Sanya Automobiles, a
Tata Motors dealership.
Top dealers, who sold over 400 cars a month, are now finding it
difficult to sell more than 250 or 300. As a result, inventories are
up from 15 days to almost two months in some cases now. "You cannot
borrow at anything less than 17-18 per cent. If you hold the stock
for two months, it wipes the entire commission of 2.5-3.5 per cent
given by the car maker," says Federation of Automobile Dealers'
Associations Secretary General Gulshan Ahuja.
To be sure, dealers also make money from service of vehicles and sale
of accessories. Industry estimates suggest that in some cases as much
as 70 per cent of their turnover comes from allied businesses.
Maruti Suzuki, the country's largest car maker, has built several
revenue streams like insurance, spares etc which its 600 dealerships
across the country can tap. "Our dealers also benefit the True Value
sale and purchase of second-hand vehicles. Also, about 50 of our car
dealers also operate driving schools in association with the company.
These additional revenue streams sustain our dealers during the
current slowdown," said a company official.
Some sector experts pointed out that though these businesses provide
a significant buffer against a slowdown in car sales, these too are
linked to car sales and are expected to dip sooner than later. To get
over the situation, dealers are lobbying hard with car companies not
to send them new stocks. Some others want to look at other
options. "With shrinking margins, most car dealers feel their
property could fetch better yields if they turned it, for instance,
into a shopping mall or an office complex," said All India Car
Dealers' Association General Secretary DS Gill.
Clearly, the boys are being separated from the men and only those
with enough financial firepower will survive the slowdown. "During
the boom time which lasted the last 5 years car dealers made good
profits. It's these profits that are helping car dealers to ride the
current difficult phase. Established cars dealers are holding out,"
Toyota Kirloskar MD (marketing) Sandeep Singh said.
