Japan sees luxury demand surpassing mass-market sales image

Mercedes-Benz, the third largest luxury automaker in the world, looks set to overshadow Volkswagen’s namesake brand for the title of the nation’s best-selling import auto brand.

The feat would be one for the books, as there are usually very few nations that achieved such an hierarchy – a premium automaker selling faster than a mass-market brand. But Japan has seen a recent and surprising increase in demand for luxury cars, allowing Mercedes-Benz to potentially accomplish such a tremendous task for the first time in the past 16 years. Sales of the Daimler brand have jumped 19 percent to 32,680 units this year through June, according to figures from the Japan Automobile Importers Association. Meanwhile, Volkswagen, the top-selling import brand in the country since 2000, have plummeted 17 percent to 29,666 vehicles. Surging demand for luxury rides has gone through the roof in Japan as the benchmark Nikkei 225 Stock Average has gained almost 100 percent since 2013. “Mercedes is gaining support from customers as they’ve been launching popular, competitive new models one after another,” said Katsuhiko Ikeda, a manager at an import cars dealership. “They are catching a big wave of the economic boom triggered by Abenomics.” Additionally, premium brands have seen a positive outcome while the broader auto market is actually on a negative trend in Japan.

Luxury brands are catching a break in Japan, after a recent sales slowdown in China, where the government has rained in on heavy spending and is conducting numerous investigations to cut down graft. Mercedes is delivering double-digit increases while the Japanese auto market succumbs – standard and minicar vehicles have seen a sales drop of 11 percent since the start of the year and have registered monthly declines in eleven of the past 12 months.

Via Bloomberg