Japan May auto sales: worst momentum since 1968 image

Japan’s auto sales slumped 38% from a year earlier in May, hammered by a shortage of parts as a result of the March 11 earthquake.

But the sales drop was less than the record plunge in the previous month, as car makers were able to operate domestic plants for the whole month for the first time since the disaster.

This was due to the repercussions of the triple crisis of the earthquake, tsunami and Fukushima nuclear incident. In May, car registrations, excluding minicars, fell by 37.8% to 142,154. With the addition of minicars sales dropped 33.4% to 237,364.

Despite the ninth consecutive drop in monthly new vehicle sales, Japanese car makers are recovering faster than expected with market leader Toyota Motor expecting its output to return to 90 percent of its pre-quake levels by this month.

Still, overall production in 2012 could be almost a million vehicles less than Toyota had planned to build at the start of the year. Lost output by the end of May was 900,000 cars.