New vehicle sales plummet 27%

Auto executives were served a fresh warning on Monday that the industry is in dire straits with data showing the worst new vehicle sales for November in 39 years.

The Japan Automobile Dealers Association (JADA) said sales plummeted 27.3 percent from a year earlier to 215,783 units.

The data showed that the global financial crisis has taken a steep toll on domestic sales of cars, buses and trucks, even though the Japanese market had been seen as relatively unscathed.

The figure excludes minivehicles with engine displacements of 660cc or less.

The 27.3-percent drop, the largest ever for November, was also the steepest since the 45.1-percent fall in May 1974 during the first oil crisis.

The margin of decline more than doubled from 13.1 percent in October, although one contributing factor was that there were three fewer business days than in the previous year.

In particular, sales of cars with engine displacements of more than 2,000cc fell 32.4 percent year on year. Sales of smaller cars fell 24.1 percent.

The nation's 12 automakers all saw sales plummet from a year earlier. Sales declined 45 percent at Mitsubishi Motors Corp. and 32 percent at Mazda Motor Corp.

"The automotive industry alone cannot find ways to galvanize demand," a JADA executive told a news conference. "The government must come up with measures to lift the economy, such as abolishing the automobile acquisition tax."

In the United States, where the financial crisis originated, new vehicle sales in October sank 34.5 percent from a year earlier.

Detroit's Big Three automakers are all struggling to survive, and automobile financing companies are squeezing on lending.

In Japan, sales of minivehicles, which had held to a brisk pace due to their low prices, also showed signs of flagging.

Sales slid 0.7 percent from a year earlier to 153,101 units in November, the Japan Mini Vehicles Association said Monday.

Sales dropped for the first time in two months even though manufacturers have rolled out new and redesigned models in recent months.

The nation's total new vehicle sales, including minivehicles, fell 18.2 percent in November from a year earlier to 368,884 units.

If sales remain at the same level in December, the annual tally for 2008 will be around 5.08 million units, or 2.7 million less than the 1990 peak of 7.78 million.

For the year, sales excluding minivehicles are expected to fall 7 percent from the previous year to 3.2 million units, the lowest level since 1974, while sales of minivehicles are expected to slide 2.1 percent to 1.88 million units.

The nation's 12 automakers have slashed initial production plans for 2008 by a combined 1.8 million units and dismissed more than 11,000 temporary workers.(IHT/Asahi: December 2,2008)