Japanese carmakers worry about economy, European debt crisis

Article by Anita Panait, on June 5, 2012

The Japan Automobile Manufacturers Association (JAMA) has expressed alarm on the major economic situations affecting the Japanese automotive industry, including the current debt crisis in Europe, the dwindling demand for cars in the United and the strong yen. According to the chairman of JAMA and at the same time chief executive officer of Toyota Motor Corp.

Akio Toyoda, those three factors are the major concerns for the Japanese carmakers in the short-term. He, however, remained positive about the performance of Japanese carmakers this year. The top three Japanese carmakers have given up most of their January-to-March share gains as the Japanese yen continues to appreciate since mid-March on continued concern about the current European debt situation. According to data compiled by Bloomberg, the yen is the best performing major currency this quarter.

Toyoda expressed optimism about the industry’s sales this year, contingent on the forecast that consumers are replacing their vehicles this year. Toyota expects to post a 21 percent hike in group sales in 2012, to 9.58 million vehicles. The company only sold 7.95 million units in 2011, partly due to the impact of a supply disruption caused by the natural disasters that hit Japan and Thailand.

According to Toyoda, vehicle owners in Europe may find it unappealing to replace their old cars due to the debt crisis. The Japanese car industry, however, has taken measures to avoid a major slowdown in the replacement cycle, Toyoda said. Toyota’s CEO said that although the downturn in the European financial markets has yet to be felt in actual sales results, it would be felt as there is “a slight gap in the timing of when things occur."

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Topics: japan, europe

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