Japan’s May surprise: JDM fails to crash, midgetmobiles save the day

DAYS-EK - picture courtesy Bertel Schmitt

The auto industry was waiting with bated breath for data on May sales from Japan. It is in Japan and in China where the tight race for World’s Largest Automaker is being decided this year. A serious drop in Japanese car sales, widely expected as a result of Abe’s sales tax increase in April, could relegate Toyota to rank 2, or even three. When the sales report came in this afternoon, it brought two big surprises.

Surprise #1: The drop is by far not as large as predicted. May sales across all segments were down only 1.2 percent year-on-year. Augurs had predicted a much deeper drop for May. These stats are registrations. Most cars are made-to-order in Japan. Sign by the end of March, take delivery by the end of April.

Surprise #2: Kei cars were up 5.3 percent in May. Sales of the 0.6 liter minivehicles have been strong for many months, and they are increasingly so. 43.1 percent of all cars registered in May were of the midget variety. (Don’t fall for stats that give you only the registered vehicles. They are missing nearly half of the market.)

Not a surprise: Sales of imports were down some 20 percent (pending better stats by the Japan Automobile Importers Association). Sales of mostly pricier imports were especially strong in the months before the tax increase. Now, the pull-forward needs to be digested.

As far as the race for World’s Largest Automaker goes, dominating the Japanese car market as much as it does, Toyota is heavily impacted by its gyrations. Toyota has not suffered as much as feared, which improves its chances to stay ahead of Volkswagen on a global level. Group-wide unit sales were down 6.8 percent in May, also because minivehicle maker Daihatsu (keis – 1.5%) failed to profit from the kei car boom. Nissan’s kei car sales nearly doubled this year.

Full table here.