Japanese Chemical Trader blog

Japan Chemical Trading Blog

Tax Increase and Sales of Cars

On May 1, “the Japan Automobile Dealers Association” announced that the number of passenger cars, freight cars and buses sold in April in Japan decreased 12.4% year-on-year from 213,165 to 188,864 units excluding light cars (kei cars).
It was the first time the sales decreased year-on-year in 8 months from August last year.

As was expected, it seems there was a rebound against the last-minute demand before the consumption tax increase from 5% to 8% in April (the number of sales in March increased by 14.5% year-on-year to 481,039 units).

The number of sales of light cars (kei cars), which fall into a different standard of displacement, that is, 660cc or less, slightly increased by 2.9% year-on-year to 1,563,621 units (according to the announcement of “the Japan Light Motor Vehicle and Motorcycle Association” on May 1).

As the upkeep cost such as tax and insurance fees as well as the car price are cheaper, the penetration of light cars is growing year by year.

The automobile industry, which is Japan’s key industry, has a wide workforce base of over 5 million (about 8% of the entire working population of Japan) in its related industries. Therefore, it is attracting attention for how long the decrease trend in sales as a rebound will persist.