Automobile production in Japan increased 1.5 percent in 2014, as stronger domestic sales offset a significant drop in exports, the Japanese Automobile Manufacturers Association announced Friday.
The association contended that the Japanese market still has room for significant growth if the government would adopt tax policies more favorable to people owning cars.
Domestic market revitalization is also predicated on the provision of an environment that facilitates the ownership and use of motor vehicles, Chairman Fumihiko Ike said in an annual recap earlier in the month.Among the many issues to be addressed in regard to the vehicle use environment, there is an especially urgent need for major revisions to Japans automobile-related taxes which, compared with those of other countries, are extremely burdensome.
Japans domestic demand for automobiles increased by 3.5 percent to 5.6 million units in 2014 – the third year in a row that the figure roses. Demand for passenger cars increased 3 percent while demand for trucks and buses jumped 6.2 percent and 6.5 percent, respectively.
Sustainable growth in Japans domestic vehicle market faced a tough challenge last year when overall consumer confidence chilled following the consumption tax increase in April and a pre-tax hike rush in demand, Ike said.
Automobile production increased 1.5 percent to 9.8 million units after decreasing in 2013. Motorcycle production increased 6 percent in 2014 to 596,982 units, halting a three-year string of decreases.
Motorcycle exports increased by 8 percent to 465,584 units and now account for 78 percent or motorcycle production. Exports to Asia and Europe showed double-digit growth of 36 percent and 17.9 percent, respectively, while exports to the United States increased 3.6 percent.
Automobile exports to Japans biggest auto export market, the U.S., fell 10.6 percent to 1.5 million, while the Middle-East showed the largest increase – 7.1 percent. Other export markets include Europe which experienced an increase of 4.9 percent; Asia, which rose 3.7 percent; and Africa, which rose 2.7 percent. Toyota was the largest exporter, followed by Mazda and Nissan.
The total number of automobile exports fell 4.5 percent to4.5 million, but that does not mean a decline in sales in overseas markets. Data reported elsewhere by the association suggested that sales of vehicles manufactured in overseas markets are rising more than fast enough to offset the decline in exports. From January through September Japanese automakers produced 13 million units, an increase of 5 percent over the same period of 2013.
Ike warned that the industry will be challenged to replicate last years results in 2014. With the scheduled rises in mini-vehicle tax rates applicable to new vehicles purchased from April this year, stringent market conditions are also projected for 2015, he said.
According to Ike, the Japanese government released at the end of last year a tax plan for fiscal 2015 to lower the tax burden on vehicle owners through specific provisions like postponing tax hikes on motorcycles for one year.Expectations for 2015 include continued buoyant demand in the U.S., a strong recovery in Europe, and growth in emerging markets, he forecast.