We forecast sales in both the passenger car segment and commercial vehicle segment to fall by 10.0% and 7.1%, respectively, in 2015, which will see the overall auto market contract by 9.5%. Our bearish outlook is predicated on a weak economy, exacerbated by a tax hike on mini cars and a continued erosion of consumer purchasing power, as wage growth fails to keep up with the rise in domestic prices.
This will in turn see total vehicle production decline 5.0% in 2015 as a weak domestic market leads to cutbacks in output.
We believe this is due to the fact that carmakers have diversified a lot of their production away from the country in recent years as well as their reluctance to heavily discount their exports from Japan in order to move larger volumes. Furthermore, Japanese carmakers have invested heavily in production facilities overseas, and cutting prices on exports would mean cannibalising the profitability of these foreign subsidiaries.
However, the weaker Japanese yen will certainly remain a tailwind for the sector. Japanese automakers have enjoyed a big boost to their profits in the past two years as the weaker yen resulted in better margins for vehicles exported from Japan and boosted the value of profits repatriated from overseas operations.
We expect these positive effects of the weak yen to remain in play for 2015. Additionally, we see Japanese carmakers becoming more competitive in export markets such as the US. The US dollar has appreciated by about 15% against the yen in the past six months and given our Country Risk team's view of continued dollar strength versus the yen over the course of the year, Japanese carmakers will be able to increase their exports to the US. A case in point is Toyota, which recently announced that it will increase SUV production at its Japanese and Canadian plants to meet rising demand for its vehicles in the US.
The Japan Autos Report features the latest data and forecasts covering production, sales, imports and exports.
BMI Research's Japan Autos Report provides industry professionals and strategists, corporate analysts, auto associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on the automotives market in Japan.
- Benchmark BMI's independent automotives industry forecasts on Japan to test other views - a key input for successful budgetary and planning in the Japanese automotives market.
- Target business opportunities and risks in the Japanese automotives sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Japan.
- Assess the activities and market position of your competitors, partners and clients via our Competitive Landscape Analysis.
BMI Industry View
Summary of BMI’s key industry forecasts and views, covering production, sales and the introduction of new technology or products.
Industry SWOT Analysis
Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the autos sector and within the broader political, economic and business environment.
BMI Industry Forecasts
Historic data series and forecasts to end- 2019 for all key industry indicators (see list below), supported by explicit assumptions plus analysis of key downside risks to the main forecast, including:
Sales and production of motorcycles in units; total production of units; production by vehicle type (including cars, commercial vehicles, trucks and buses); total vehicle fleet size in units; sales by vehicle type, including passenger cars and commercial vehicles; fleet size by vehicle type, including passenger car, commercial vehicles and motorcycles; total vehicle trade balance in units; vehicle trade balance by vehicle type, including passenger car, commercial vehicle and motorcycle; car ownership measured as car density per 1,000 people.
BMI’s Autos Risk Reward Index
BMI’s Risk Reward Index provides investors (manufacturers, suppliers and dealers) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points. These provide indices of highest to lowest appeal to investors, with each indices explained.
BMI Economic Forecasts
BMI forecasts to end-2019 for all headline macroeconomic indicators, including real GDP growth, inflation, fiscal balance, trade balance, current account and external debt.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
Global, Regional and Country Industry Overviews
In-depth analysis of the major global and regional developments in the market, which can be linked with the country industry overview, providing cross-country investment, product and financing trends that will affect each market, supported by BMI’s global and regional industry forecasts.
The Autos reports draw on an extensive network of primary sources, such as manufacturing associations, statistical bureaus, government transport ministries, national chambers of commerce and industry, national statistical offices, government ministries and central banks and multinational companies.
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.