Japan’s new vehicle sales mark largest fall in April

All looking very weak, probably weaker than expectations, and the (modest) new spending appears to be paid for by reductions in other spending, so no fiscal response yet.


Japan’s new vehicle sales mark largest fall in April
Japan’s Wages Fall, Highlighting Risks to Economic Recovery
Japan Passes Y4tln Emergency Budget, But Political Standoff Not Over
Domestic Auto Sales Fall 51% In April

Japan’s new vehicle sales mark largest fall in April

Workers give the final checkup on the cars of Honda Accord Tourer at Honda Motor Co.’s Saitama Factory in Sayama, north of Tokyo, Monday, April 18, 2011.(AP Photo/Shizuo Kambayashi)TOKYO (Kyodo) — Sales of new vehicles including minivehicles in Japan marked the largest fall of 47.3 percent in April from a year earlier to 185,673 units in the wake of the devastating March 11 earthquake and tsunami in the country’s northeastern region, industry bodies said Monday.

The sales volume was also the record monthly low, which was smaller than the previous low of 198,693 units marked in January 1968, according to the Japan Automobile Dealers Association and the Japan Mini Vehicles Association.

The rate of decline beat the previous record fall of 40.7 percent in May 1974 as disruptions in supply chains triggered by the disaster forced automakers to significantly curtail output.

Sales of vehicles, excluding minivehicles with engines of up to 660 cc, plunged 51.0 percent to a record low of 108,824 units, falling for the eighth straight month and registering the sharpest percentage fall.

Minivehicle sales dropped 41.1 percent to 76,849 units, also marking the largest percentage fall.

Japan’s Wages Fall, Highlighting Risks to Economic Recovery

May 2 (Bloomberg) — Japan’s wages slid for the first time in 13 months in March, underscoring the risk that slumping consumer spending may undermine the recovery from an earthquake that left more than 25,000 people dead or missing.

Monthly pay including overtime and bonuses dropped 0.4 percent from a year earlier to 274,886 yen ($3,383), the Labor Ministry said today in Tokyo. Overtime work hours fell 2 percent to 10.1 hours, the data showed.

The wage data highlight the economic damage from the March 11 disaster, which caused a record decline in factory output and decreases in retail sales, household spending and consumer confidence. Japan’s parliament passed today a 4 trillion yen ($49 billion) extra budget put together by Prime Minister Naoto Kan to pay for reconstruction in the northeast area.

“The impact of the earthquake on wages will materialize in coming months,” said Azusa Kato, an economist at BNP Paribas in Tokyo. “Corporate earnings are worsening, which could prompt companies to start cutting salaries,” and that “will likely weigh on personal consumption.”

The Nikkei 225 Stock Average rose 1.6 percent to close at 10004.20 today after U.S. companies reported better-than- expected earnings and President Barack Obama said al-Qaeda leader Osama bin Laden was killed. The yen weakened 0.3 percent to 81.47 against the dollar at 4:16 p.m. in Tokyo.

Nomura’s Income

Nomura Holdings Inc., Japan’s largest brokerage, said last week its net income fell 35 percent to 11.9 billion yen in the three months ended March 11, as income from investment banking and trading declined.

Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co., Japan’s three biggest carmakers, say domestic output plunged in March. Toyota may lose output of 300,000 vehicles in Japan and 100,000 overseas through the end of April due to quake-related shutdowns, Executive Vice President Atsushi Niimi said last month.

Sales of cars, trucks and buses, excluding minicars, fell 51 percent in Japan from a year earlier to a record-low 108,824 vehicles in April, the Japan Automobile Dealers Association said in a statement today.

Japan’s industrial production plunged 15.3 percent in March from February, the largest drop since data began in 1953, government data showed last week. Household spending slid 8.5 percent from a year earlier in March, while consumer confidence fell the most on record, data last month showed.

‘Severe’ Outlook

The Bank of Japan last week cut its growth estimate for the nation for the year ending March 2012 to 0.6 percent from a January prediction of 1.6 percent, with Governor Masaaki Shirakawa saying the economic outlook is “severe.”

Consumer spending may decrease in both the first and second quarters and rebound in the third quarter at the earliest, BNP Paribas’ Kato said. Such outlays make up about 60 percent of Japan’s gross domestic product.

Kan’s extra budget, which the prime minister says will be one of several financing packages for rebuilding, may create around 200,000 jobs and support some 1.5 million workers, the government estimated last week.

The government projected in March that damage from the disaster may reach 25 trillion yen.

Seven & I Holdings Co., the owner of the 7-Eleven convenience-store brand, said last month its full-year profit may decline 22 percent. Aeon Co., which may surpass Seven & I to become the country’s biggest retailer in terms of revenue this fiscal year, said net income may decline 33 percent.

Japan Passes Y4tln Emergency Budget, But Political Standoff Not Over

(Dow Jones) Japan’s parliament passed a Y4 trillion disaster relief budget on Monday. The extra budget, which totals Y4.015 trillion and is the first of a planned series of spending packages to deal with the aftermath of the disaster, does not involve additional government borrowing as it will be financed by funds previously earmarked for other spending. The government will now shift its focus to drafting a broad after-quake reconstruction plan as well as a long-term blueprint to overhaul Japan’s tax and social security systems by the end of June. The government will then compile a second extra budget to fund other quake-related measures, Prime Minister Kan and Finance Minister Yoshihiko Noda have indicated.

Domestic Auto Sales Fall 51% In April

(Dow Jones) Japan’s domestic sales of new cars, trucks and buses dropped 51.0% from a year earlier in April, as supply chain problems after the massive earthquake and tsunami on March 11 reduced supplies of new vehicles to customers. Sales totaled 108,824 vehicles in April. The sales drop in April came after a 37% on-year decline in March. Sales of Toyota Motor Corp. vehicles dropped 68.7% to 35,557 vehicles in April, with those of its luxury brand Lexus down 44.7% at 1,656. Nissan Motor Co. vehicle sales tumbled 37.2% to 17,413 in the month, while Honda Motor Co.’s sales sagged 48.5% to 18,923. Auto sales are the first consumer spending numbers released each month. The figures don’t include sales of mini cars and trucks.