Japan Auto Sales Slump - 16th Consecutive Month

Japanese auto sales continue to decline

Industry still suffers lack of new models

HERALD NEWS | TOKYO: Auto sales in Japan declined for a 16th consecutive month, led by Nissan Motor and Mazda Motor as a lack of new models deterred customers.

Sales of cars, trucks and buses, excluding minicars, fell 6.2 percent to 263,882 vehicles in October from the same month in 2005, the Tokyo-based Japan Automobile Dealers Association said Wednesday. Nissan's sales dropped 8.2 percent, and Mazda's fell 18 percent.

The country's vehicle market excluding minicars is suffering from the longest sales slump since 1999. The chief executive of Nissan, Carlos Ghosn, has said Japan's second- largest automaker will avoid having a dearth of new vehicles in the future after releasing only one minicar model.

"It's another month that proves in Japan, you need new or redesigned vehicles to increase sales," said Koji Endo, a senior analyst at Credit Suisse Group in Tokyo. "On the other hand, minicars are set to reach record sales this year as customers prefer cheaper, more fuel-efficient vehicles."

Sales of mini vehicles with engines no larger than 0.66 liter jumped for a 10th month in October, the Japan Mini Vehicles Association said in a statement. Minicars attract customers with lower taxes and insurance rates.

The decline in the domestic market contrasts to sales in the United States, the world's largest car market. Toyota Motor may report sales in the U.S. grew 10 percent last month, according to analyst Brian Johnson of Lehman Brothers Holdings. Toyota, the world's second- largest carmaker, may boost U.S. sales on demand for its Tundra pickup truck.

Toyota's U.S. market share rose 2.2 percentage points to 15.2 percent through September, while Honda Motor's share increased 0.7 percentage point to 9.1 percent, according to industry researcher Autodata. Honda's gains were probably led by its Civic and Civic Hybrid sedans.

Nissan sold 39,454 vehicles and Mazda's sales totaled 13,722 units in Japan last month.

Toyota, Honda and other Japanese automakers are speeding up new model releases as they try to stem the sales slump. Last month, Toyota introduced a redesigned version of the Corolla sedan for the first time since 2000. Honda revamped the CR-V sport-utility vehicle, and Mitsubishi Motors Corp. began selling a redesigned version of the Pajero SUV.

Toyota, Japan's largest automaker, sold 126,217 vehicles excluding Lexus- brand cars, down 6.6 percent. Sales at Honda, Japan's third-largest carmaker, fell 8.7 percent to 32,396 units. Sales at Mitsubishi Motors Corp. dropped 10 percent to 5,285 units.

A spate of new models helped sales of minicars rise 1.2 percent to 147,848 units, the Japan Mini Vehicles Association said. Honda released the Zest in March, followed by Fuji Heavy's Stella and Daihatsu's Sonica in June. Mitsubishi Motors rolled out the eK in September, and Daihatsu revamped its best- selling Move last month. Suzuki Motor, Japan's largest minicar maker, will release a new Cervo minicar on Nov. 7.

Parts maker hurt by strikes

Hyundai Mobis, South Korea's largest auto-parts maker, reported third- quarter profit fell 28 percent as Hyundai Motor and Kia Motors ordered fewer components because of labor strikes.

Net income dropped to 135 billion won, or $144 million, in the three months ended Sept. 30, compared with 187.8 billion won a year earlier, Hyundai Mobis said. Sales fell 0.5 percent to 1.78 trillion won.

Bridgestone profit falls 69%

Bridgestone, the world's second- biggest tiremaker, said nine-month profit plunged 69 percent on higher costs for rubber and oil.

Net income totaled ¥50.1 billion, or $428 million for the nine months ended Sept. 30, compared with ¥159.4 billion a year earlier, Bridgestone said. Sales rose 13 percent to ¥2.16 trillion from ¥1.92 trillion.

Bridgestone also said Wednesday it expects full-year profit to fall for the first time in five years. The company in August said net income may fall 66 percent to ¥62 billion for the year ending Dec. 31.