Japanese automakers are wiping sweat off their foreheads. Not just because summer is back with a vengeance. Japan’s auto sales in June were up a tiny bit, much to the surprise of everybody.
Summer brought an even bigger surprise.
Industrial sages predicted a double-digit fall of auto sales after a sales tax hike in April caused a massive run on dealerships in the months before. The drop is not happening. Overall new registrations were up 0.4 percent in June. Regular vehicle sales were down a tiny 0.7 percent compared to June 2013. Sales of mini vehicles were up 1.9 percent in June.
Strong sales of kei cars are the even bigger surprise. Packed into the sales tax hike were higher taxes for the previously tax-advantaged mini vehicles. Soothsayers predicted the death of the segment. It is not happening. In the contrary, the 0.6 liter mini cars are Japan’s hottest sellers. More than 40 percent of all cars sold in Japan are of the kei car variety. Previously a mainstay of country folk, kei cars are turning into cool urban conveyances. The cars are cheap (anywhere between $10,000 and $15,000), they are easy to park and surprisingly roomy inside.