Japan Auto Industry

The Japanese automotive market comprises passenger vehicles and trucks.

Market size of the Japan auto industry

In 2003, domestic sales amounted to 5.81 million units while production was 10.28 million units, up 0.2 percent from 2002.  The US auto industry had sales of 16.93m units and the Europe auto industry registered sales of 15.63m.  Within Europe, the UK auto industry had sales of 2.94m units. Out of the most rapidly developing nations, the China auto industry had the largest amount of sales in 2003 at 4.44m units, and the India auto industry saw sales of 1.17m units.

GDP and motor vehicle growth in the Japan auto industry

The Japan auto industry is among the global leaders, employing 8 percent of the domestic workforce and earning vast amounts of foreign currency through exports and operations in other countries. About 5.1 million people in Japan work in the automotive industry or some related activity - one in every twelve workers is employed directly or indirectly by the Japan auto industry.
 
The automobile industry is one of Japan's post-war economic success stories, with vehicle production rising from just over 30,000 units in 1950 to over 13 million units in 1990 and dipping thereafter to around 10 million units currently, see figure 30. Purchase full report here. The motor vehicles sales growth (including exports) is directly correlated with economic growth.

Passenger vehicle and truck sales in the Japan auto industry

A total of 4.46 million units were sold in 2003. Passenger vehicle sales have been positive year-on-year, see figure 31. The launch of new car models drove volumes to high levels in 2002 and 2003. Imports constituted 6.2 percent of the total passenger vehicles sales in 2003.

The small (661 cc – 2000 cc) and mini-car (660 cc and under) sectors have a dominant presence in the Japanese market, see figure 32. In 2003, these two segments together accounted for 83 percent (equal to 3.69 million units) of the Japanese market.

A further breakdown shows small cars accounting for 54 percent and the popular mini cars constituting a 29 percent share. Overall, 76 percent of the imports are large cars in a market dominated by small and mini cars. Recent automotive trends show that the sales of mini cars are rising in Japan due to fuel economy and maneuverability - the latter feature extremely useful in Japan where cramped driving conditions and parking space shortage are the norm. Attractive tax and insurance benefits are also available for these vehicles.

The decline in small trucks is due to the slowdown in the Japanese economy. The broadly increasing economic life of transport vehicles is also depressing demand to some degree. Better technology and improved maintenance are prolonging the life of transport vehicles - thus reducing replacement demand. In 2003, there was a rebound in truck sales even though it is lower than the 2000 level, see figure 33, due to a new regulation passed by the Japanese Government, imposing stricter diesel emission norms. This has led to a higher replacement demand, especially for heavy and standard trucks.

Major players in the Japan auto industry

Toyota Motor Corporation enjoyed a 39 percent share of the Japanese market in 2003 with 1.4 million units, see table 18, and continues to maintain its position as the leading automobile maker. Domestic sales were primarily driven by new model launches and the strong sales of minivans. Toyota’s truck sales, see table 19 overleaf, were up because of the good show put up by the small truck segment. Despite the overall slump in the market arising from depressed personal consumption, Toyota nearly sold the same number of vehicles in 2003 as it did in the previous year.

Honda has focused considerable attention on developing unique products for its customers in Japan. But because of a sluggish economy, unit sales fell by 20.54 percent to close at 663,025 units.

Nissan Motor is the second largest automobile maker in Japan after Toyota. Nissan’s partnership with Renault (see automotive mergers and acquisitions), which started ‘The Nissan revival plan’, aided by the launch of new models, Nissan Motors boosted sales marginally to 825,090 units. Nissan is also the second largest player in the small and mini trucks market.

Suzuki Motor has maintained its leadership in mini-car sales in Japan for the past 31 consecutive years.  It holds 32 percent of the mini-vehicles (cars) market. Using its engineering capability for compact cars, Suzuki manages vehicle assembly and manufacturing operations through 15 affiliates in 14 countries. It is also the leader in the mini trucks segment, where it holds a 30 percent market share.

Daihatsu is a subsidiary of Toyota and is also the second largest player in the mini vehicle market for cars and trucks after Suzuki.

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