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

Article by Christian A., 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.

If you liked the article, share on:

Topics: japan



Earlier this week, we talked about Volkswagen’s plans to halt the production of the US spec Passat for a few weeks during spring. And now, we just learned new things...
by - March 17, 2018
In the past couple of months, there have been a number of special edition McLarens that have been released in the past few months. Some of these include the 720S...
by - March 16, 2018
The Lamborghini Huracan LP580-2 has been out in the market for about 2 years now, with the last number in the model’s name indicating that the vehicle has a two...
by - March 16, 2018
Have you been imagining yourself driving a Polestar 1? If you have, now is the time for you to pre-order the 600 horsepower (447 kilowatt) hybrid coupe before it arrives...
by - March 15, 2018
Rumours have been going around about Nissan’s next generation Z car, because apparently, the Japanese automaker is planning to build a partnership between Mercedes-Benz to develop this particular model. The...
by - March 15, 2018