Consumer tax hike caused vehicle sales to drop 5.5% in Japan

Article by Christian Andrei, on May 4, 2014

Vehicles sales in Japan dropped 5.5 percent to 345,226 units in April, according to the Japan Automobile Dealers Association and Japan Mini Vehicle Association. The drop was attributed to the start of the implementation of an increase in consumption tax, which was raised from 5 percent to 8 percent effective April 1, 2014.

Prior to that, auto sales in the country had surged seven months in a row. The decline could also indicate the extent of the consumer backlash over the higher taxes imposed to ease Japan’s debt burden. Economists expect Japan to experience its biggest economic contraction since the 2011 earthquake and tsunami.

Martin Schulz, an economist at Fujitsu Research Institute, told Bloomberg that “any sane person” would buy more expensive items in February or March rather than in April. Her noted that Japanese carmakers will have to prove “how much they really can work” their home market.

The decline in April may continue in May, poor weather prevented some customers from receiving their cars until April. This means that the industry sales figures in April were artificially high, according to Yoshitaka Hayashi, a director at the dealer association.

Hayashi added the figures could turn “very grave” starting May. The Japan Automobile Manufacturers Association is expecting vehicle deliveries to drop to an all-time high of 16-percent for the fiscal year ending March 2015.

For April 2014, Toyota Motor Corp. and Mazda Motor Corp. both sold their fewest number of vehicles since 2011 while Fuji Heavy Industries Ltd., posted a 41-percent drop in sales in the month. On the other hand, Nissan Motor Co., Honda Motor Co., Suzuki Motor Corp. and Mitsubishi Motors Corp. all posted sales hikes in April.

Topics: japan

If you liked the article, share on:

Comments

Login or Create new account to add a comment!

Recommended

Did you miss the opportunity to get a brand new Dodge Viper? Well, here’s something you don’t want to miss. Dodge has announced a “final call” for orders for its...
by - December 6, 2016
Acura fans and customers rejoice! Sales have begun for the flagship model of Acura’s RLX top-of-the-range sedan – the 2017 Acura RLX Sport Hybrid. Described by Acura as its most...
by - December 6, 2016
Autonomous cars are slowly but surely gaining more appeal among drivers around the world. While a complete self-driving system has yet to be launched, carmakers have been finding ways to...
by - December 6, 2016
BMW has officially ended the production cycle for what is considered as its meanest and fastest sports car – the BMW M4 GTS. Basically a power-up evolution of the BMW...
by - December 6, 2016
Now that Lamborghini is set to bring a “more aggressive” Aventador, it only makes sense that it will be given a name. Seeing how it goes, perhaps we won’t be...
by - December 6, 2016
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries