December 17, 2010

Forecast for Japan's Vehicle Demand in Calendar Year 2011

Motor Vehicles

  1. Total Demand for Passenger Cars & Commercial Vehicles
    1. Total sales of passenger cars and commercial vehicles in Japan for calendar year 2010 should finish at 4.96 million units, a gain of 7.5% from the previous year. Demand for new vehicles excluding mini-vehicles is estimated at 3.24 million units (up 10.8% from 2009), while mini-vehicle demand is forecast at 1.72 million units (up 1.8%)
      The first half of 2010 saw the market stage a major comeback. In addition to a gentle business recovery, demand was also stimulated by tax reductions and purchasing subsidies applied to eco-friendly vehicles.
      The second half of the year was marked by a leveling off in the economy prompted by the sharp appreciation of the yen from the autumn, as well as the end of the effects from the purchasing subsidies (which concluded in early September). While the market finished below the previous year for the second half, overall demand in 2010 is expected to score a gain over the performance in 2009.

    2. Turning to 2011, though tax reductions for eco-friendly vehicles will be continued, uncertainly over the future of the economy, as well as a reactionary downturn in sentiment accompanying the end of purchasing subsidies is expected to negatively impact sales of passenger cars and commercial vehicles. Demand in this category should finish at 4.47 million units for 2011, down 9.9% from the previous year.

      Of this total, sales of new vehicles excluding mini-vehicles are forecast at 2.81 million units (down 13.3% from 2010), while those for mini-vehicles should be 1.66 million units (down 3.6%).

  2. Standard & Small-Sized Passenger Cars
    1. Sales of standard and small-sized passenger cars in 2010 should finish at 2.94 million units, for a gain of 11.3% over the previous year. A major factor supporting this increase is the effects of tax cuts and purchasing subsidies for eco-friendly vehicles. 

    2. Demand for standard and small-sized cars in calendar 2011 is forecast at 2.52 million units (a drop of 14.1% from the previous year), owing largely to the reactionary downturn in the wake of the end of the eco-friendly vehicle purchasing subsidies.

  3. Mini Passenger Cars
    1. Mini passenger car sales in 2010 are estimated to be 1.28 million units, down 0.3% from the previous year.
      Though tax breaks and purchasing subsidies applied to eco-friendly vehicles helped fuel demand in this category, the sluggish domestic economic recovery from the autumn has set the stage for sales to finish on a par with the results in 2009.

    2. In 2011, stemming from uncertainly over the future prospects of the economy, total demand for mini passengers cars is forecast to reach 1.26 million units, edging down 1.6% from 2010.

  4. Standard Trucks
    1. Standard truck demand in 2010 is projected to come in at 101,000 units, up 15.2% from the previous year.
      Though the pace of economic recovery slowed from the autumn, the first half of the year saw demand rise on the strength of improved payloads and corporate earnings, as well as the support of tax cuts and purchasing subsidies for eco-friendly vehicles. As a result, the overall sales total for 2010 is expected to finish well above that of the previous year.

      Within this category, demand for heavy-duty and medium-sized trucks should reach 49,000 units in 2010, posting growth of 22.1% over the year before.

    2. Sales in this category in 2011 are forecast come in at 99,000 units, down 2.0% from 2010. Contributing factors include the sense of uncertainty over economic prospects. Against this backdrop, while the supplementary budget at the beginning of the year will include purchasing subsidies for commercial vehicles, the subsequent reactionary slide is expected to produce the aforementioned decline.

      For the heavy-duty and medium-sized trucks in this category, demand should finish at 48,000 units, a year-on-year decline of 2.0%.

  5. Small Trucks
    1. Sales of small trucks in 2010 should be 186,000 units, up 3.0% from 2009.
      As with standard trucks, demand in this category was boosted by tax reductions and subsidies for purchases of eco-friendly models, leading to projections that results will finish above the level recorded in 2009.

    2. In 2011, future economic uncertainty is expected to play a major role in holding sales to 174,000 units (down 6.3% from 2010).

  6. Mini-Trucks
    1. Mini-truck demand in 2010 is projected to finish at 438,000 units, scoring a gain of 8.2% from the previous year.
      While impact is being felt from the structural factor of declining numbers of small retailers, farming households and other principle users of these trucks, replacement demand in 2010 was spurred by the purchasing subsidies also applied to this category.

    2. In 2011, however, continuation of the aforementioned structural shift is forecast to hold sales down to 398,000 units (a decline of 9.1% from 2010).

  7. Large Buses
    1. Sales of large buses in 2010 should reach 48,000 units, up 13.4% from the previous year. In addition to firm replacement demand, the tax cuts and purchasing subsidies on eco-friendly models was also a factor in stimulating demand, which grew with the focus on route buses in the category. 

    2. In 2011, the structural factor of sluggish growth in users of public transportation is likely to be compounded by the downturn prompted by the end of purchasing subsidies. As a result, sales in this category are forecast to finish at 4,000 units, down 16.7% from 2010.

  8. Small Buses
    1. Demand for small buses in 2010 should finish at 7,900 unit sales, a decline of 5.3% from 2009. The chief factors behind this performance include the sluggish business recovery and reduced replacement demand.

    2.  In 2011, uncertainly over the future of the economy is expected to continue to negatively impact sales in this category, which are forecast to close out the year at 7,700 units (down 2.5% from 2010).


  1. Total Demand for Motorcycles

    The Japanese domestic motorcycle market continues to languish in a prolonged slump, caused by the decline in the number of young people, shifts in consumer preferences and other factors. This is also the result of uncertainty over the economy, higher vehicle prices from mandatory compliance with emissions regulations, the chronic shortage of motorcycle parking availability in urban areas and other negative aspects that have not been readily resolved. While there are also positive developments from the effects of new models, projections are for a continued trend of depressed overall sales for motorcycles. Against this backdrop, the final figures for motorcycle demand in Japan for 2010, and the performance forecasts for 2011, are forecast as follows.

    1. Total motorcycle demand in Japan in calendar 2010 should finish at 419,000 units, down 3.3% from 2009.
      This reflects declining sales in the Class-1 motor-driven cycle, mini-sized motorcycle and small-sized motorcycle displacement categories.

    2. For calendar 2011, while demand for Class-2 motor-driven cycles is expected to run solid, sales of Class-1 motor-driven cycles, mini-sized motorcycles and small-sized motorcycles are believed to dip slightly below the previous year levels. As a result, total domestic motorcycle demand in 2011 is projected at 409,000 units, down 2.4% from 2011.

  2. Class-1 Motor-Driven Cycles (50cc & under)
    1. Demand for Class-1 motor-driven cycles in 2010 should be 228,000 units, down 10.8% from 2009.
      This sales decline has been caused by prolonged purchase reluctance under the impact of rising vehicle prices due to mandatory compliance with emissions regulations.

    2. In 2011, projections are for a continuation of purchase reluctance underscoring anxiety over the direction of the economy. Consequently, sales in this category are expected fall to 216,000 units (down 5.3% from 2010).

  3. Class-2 Motor-Driven Cycles (51cc-125cc)
    1. Demand for Class-2 motor-driven cycles in 2010 should finish at 96,000 units, a jump of 45.7% from 2009. This is the result of a major advance in sales, buoyed by new model effects that have keenly stimulated consumer confidence.

    2. In 2011, the new model effects carried over from the previous year are expected to continue to be a positive factor, with sales climbing by 7.3% over 2010 to 103,000 units.

  4. Mini-Sized Motorcycles (126cc-250cc)
    1. Mini-sized motorcycle sales in 2010 are projected to finish at 37,000 units, a slump of 23.1% from the previous year. The declining purchase power among younger age groups, together with continued reluctance to purchase scooters (particularly in urban areas) has led to this major drop in demand.

    2. In 2011, the continued harsh conditions in the employment and income environments, primarily for younger age groups, should hold total annual sales in this motorcycle category to 34,000 units – an 8.1% decline from 2010.

  5. Small-Sized Motorcycles (over 250cc)
    1. Sales of small-sized motorcycles in 2010 are projected to close out the year at 58,000 units, a drop of 9.0% from 2009.
      This demand decline is indicative of the severe employment and income conditions for middle-aged and elderly riders, the core buyers in this motorcycle class, which is adversely impacting consumer confidence.

    2. For 2011, despite expectations for new model effects, there will also continue to be uncertainty about what the employment and income situation may hold. As a result of that and other factors, overall demand for motorcycles in this class is expected to conclude the year at 56,000 units, down 3.4% from 2010.

[Data chart attached (PDF)]