Japan: auto sales recover after tax hike image

New car sales in Japan posted their first monthly gains after in April the government increased a due for the first time since 1997.

The car sales grew positively for the first time in the last three weeks, as deliveries in June went up 0.45 to 452,555 vehicles, according to figures coming from the Japan Automobile Dealers Association and Japan Mini Vehicle Association. This adds to the evidence that consumer confidence has managed to withstand the consumption tax hike imposed by Prime Minister Shinzo Abe’s government.

The world’s third largest auto market saw monthly sales dropping 5.5 % in April and only 1.2% in May, with the due increase also failing to stop growth in the minicars segment – a well known Japanese forte – which has increased sales each and every month over the past year.

“Minicars have been helping the overall unit sales,” said Satoshi Okumoto, the chief executive officer in Tokyo at Fukoku Capital Management Inc. “The unit sales didn’t plunge as much as last time when Japan increased consumption tax because more carmakers are introducing minicars.”

While deliveries of non-minicars continued to post a slightly downward trend, slumping 0.7%, the sales of minicars, which make up to almost half of the total vehicle market, have gone up 1.9 % last month, after they increased 2.9% in April and 5.3% in May.

Via Bloomberg