Domestic vehicles sales in Japan last year were down slightly from 2020 and remained well behind 2019, according to data released by the Japanese Automobile Manufacturers Association. Factors impacting the country’s automotive industry include the COVID-19 pandemic and supply side constraints, including the global semiconductor shortage.
Japan’s domestic vehicle sales slipped 4% in 2021 to 4.4 million units and remained 15% behind 2019’s 5.2 million units sales pace. In 2021, sales of new vehicles in Japan peaked at 613,003 in March and bottomed out at 279,341 in October.
Passenger car sales decreased 4% to 3.7 million last year, which was also 15% behind the 4.3 million units sold in 2019. Truck sales decreased 2% to 765,762 units, 13% shy of 880,539 trucks sold in 2019. Last year’s domestic bus sales of 6,880 was down 26% from 2020 and 51% below 13,586 units sold in 2019.
The country’s domestic motorcycle sales increased 15% to 378,720. That 2021 total was 14% less than in 2019.
The Bank of Japan predicted in its January 2022 Outlook for Economic Activity and Prices released yesterday that the country’s real gross domestic product increased during last year’s second quarter and then decreased in the third. “Mainly due to a drop in consumption of durable goods, such as automobiles, that was affected by supply-side constraints, private consumption also declined, with services consumption being at a low level in reflection of the Delta [COVID-19] variant,” it said.
The bank explained that the output gap – which captures the utilization of labor and capital – deteriorated slightly for the July-September quarter of 2021, “reflecting declines in the capacity utilization rate and working hours for the manufacturing industry, particularly the automobile industry, with economic activity, such as in the face-to-face services industry, remaining restrained due to the spread of COVID-19.”
Current profits have deteriorated for manufacturers in the automobile and related industries due to the effects of supply-side constraints, the bank said, but this is expected to eventually change. “Industrial production is likely to increase, particularly for automobile-related and digital-related goods, as the effects of supply-side [disruptions] wane.”
The bank was more optimistic about the future. “In the corporate sector, exports and production are expected to increase firmly, supported by steady external demand, as the effects of supply-constraints wane,” it stated. “In the household sector, with vigilance against COVID-19 and the effects of supply-side constraints on automobiles waning, private consumption is likely to recover, particularly for face-to-face services and durable goods.”