Japan's domestic auto sales down 26%

The Wall Street Journal (Tokyo) - Japan's auto sales dropped 26% in August from a year earlier, as production disruptions after the massive earthquake in March were still holding up the supply of vehicles five months later.

But the industry is hoping to see a sales recovery from October as companies begin to ramp up output to make up for lost time.

The result in August, which marked the 12th consecutive monthly decline, also reflected a high basis of comparison in the year-earlier month, when sales surged by nearly 50% as consumers rushed to take advantage of government subsidies for fuel-efficient vehicles before the offer expired in September.

"Last year was unusually strong...we don't expect sales to keep dropping by around 30% in the coming months," said a spokesman at the Japan Automobile Dealers Association, which released the data.

The result in August came after a 28% on-year fall in July, a 23% drop in June and a 38% fall in May. In April, the first monthly data to fully take into account the impact of the March 11 earthquake and tsunami on Japanese auto production and consumer sentiment, sales plunged 51%.

Still, the Japanese auto market is heading for a recovery as companies prepare to boost production once their supply chains return to normal, the spokesman said.

"All car makers are set to make big volume increases in the fiscal second half" that starts in October, as their quake-disrupted parts supply chains will be back to normal, Toshiyuki Shiga, the chairman of the Japan Automobile Manufacturers Association, a different industry body, said at a Wednesday media briefing.

Toyota Motor Corp. plans to boost production in September, one month earlier than initially planned, to catch up on the previous six months.

Honda Motor Co. plans to increase output volume by 25% in the fiscal second half, while Nissan Motor Co. expects its manufacturing to be back to pre-quake conditions in October.

Sales of new cars, trucks and buses in Japan stood at 216,510 vehicles in August. The figure does not include sales of mini cars and trucks with engine capacities of 660 cubic centimeters or less.

Toyota's sales sagged 24% to 98,376 in August, but those of its Lexus upscale brand rose 67% in the month, according to JADA data.

Nissan sold 33,776 vehicles in the month, down 25% on-year, while Honda's sales slumped 49% to 25,549 vehicles.