Nissan Motor Co., Japan's third- largest carmaker, led a drop in domestic auto sales in May, as higher taxes and fuel costs cut demand for new vehicles.
Sales of cars, trucks and buses fell 6.1 percent to 221,377 from a year earlier, the Japan Automobile Dealers Association said in a statement today. The total excludes minicars.
Japan's consumer spending has slumped because of inflation driven by higher food costs and a record price for gasoline. Car sales also dropped on one less selling day and after the tax rate on automobiles rose to 5 percent in May from 3 percent in April.
``With gasoline prices so high, consumer sentiment is taking a big hit,'' said Takashi Aoki, who helps manage about 130 billion yen ($1.2 billion) at Mizuho Asset Management Co. in Tokyo. ``People aren't spending money at shopping malls and they certainly aren't driving there either.''
Gasoline in Japan surged to a record 160.3 yen a liter ($5.76 a gallon) last week. The tax rate fell for one month in April after the government failed to agree on a revenue bill.
The high gasoline prices also deterred transport companies from buying new trucks. Truck sales in May fell 16 percent to 29,659 units.
Emerging Markets
Japanese carmakers are reducing their reliance on mature markets such as Japan and the U.S., where sales are slowing, and expanding in emerging markets. Japan's stagnant wages and a shrinking population dragged vehicle sales, excluding minicars, to the lowest in 35 years last year.
China surpassed Japan as the world's second-biggest auto market after the U.S. in 2006. Emerging market sales will outstrip those of Japan, the U.S. and Europe combined by 2010, according to consulting company Global Insight Inc.
Sales at Nissan dropped 11.4 percent to 33,681 vehicles. Last month, the company's sales surged 11.5 percent, the most of any carmaker, as consumers rushed to buy vehicles at the lower tax rate.
Toyota Motor Corp.'s sales fell 2.8 percent to 105,519 vehicles in May. Honda Motor Co., Japan's second-largest carmaker, sold 26,900 vehicles, a 5.1 percent increase, helped by its revamped Fit compact.
New Models
Japanese automakers are introducing new models in the country to capture a bigger share of the shrinking Japanese auto market. Japan vehicle sales, including minicars, will likely fall to about 5.32 million units this year a fourth straight annual decline, according to the Japan Automobile Manufacturers Association.
Toyota, which plans to raise domestic sales 0.6 percent to 1.6 million vehicles this year, has introduced three new models in Japan through May. Honda released its new Freed minivan in Japan on May 29, as it aims to raise the company's domestic market share to at least 15 percent from 12 percent now.
Toyota rose 1.9 percent to close at 5,470 yen on the Tokyo Stock Exchange. Honda gained 2.3 percent to 3,610 yen and Nissan rose 0.9 percent to 945 yen.
Sales of minicars, powered by engines no larger than 0.66 liters, fell 2.8 percent to 139,147 units last month, according to the Japan Mini Vehicles Association. Minicar sales peaked in 2006 at 2.02 million units.
Daihatsu Motor Co., Japan's largest minicar maker, boosted sales 3.9 percent to 49,168 units. Suzuki Motor Corp., the country's second-largest minicar maker, sold 45,018 minicars, little changed from last year. The two carmakers were helped by the introduction of new models in December and January respectively. Honda's minicar sales fell 20 percent to 13,056 due to aging models.
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