Japan July auto sales slump, Honda's hit run ends

TOKYO, Aug 1 Edwina Gibbs writing for Reuteurs reported that demand for new vehicles in Japan slumped in July from a year earlier as a long run of impressive gains by Honda Motor Co (Tokyo:7267.T - News) ran out of steam and depressed consumer confidence took its toll, data showed on Thursday.

Excluding Nissan Motor Co, Thursday was also not a good day for other automakers, with Mitsubishi Motors Corp (Tokyo:7211.T - News) announcing another embarrassing recall and Toyota Motor Corp (Tokyo:7203.T - News) seeing its full-year targets slip further away.

Overall sales in July slid 4.2 percent to 527,486 vehicles, down for the second month in a row, data from the Japan Automobile Dealers Association and the Japan Mini Vehicle Association showed.

The numbers, which are not seasonally adjusted, were even worse than they looked since there were two extra working days in the month to register sales compared with July last year.

Sales of ordinary vehicles sank 5.8 percent to 367,902 units while demand for cheaper 660cc minivehicles, which account for around one-third of the market, slipped 0.1 percent to 159,584.

"Given there's a clear calendar effect with two extra days and it's after a weak month in June, July results certainly aren't encouraging," said Kurt Sanger, auto analyst at ING.

Honda's run as the nation's only automaker to clock up strong figures for the previous 12 months came to an end with its overall sales dropping 7.3 percent.

Earlier gains had come on the back of its popular Fit subcompact. The car was launched last July, making year-on-year numbers hard to match this month.

Sales of its Oydssey and Stream minivans have also weakened, with Honda acknowledging earlier this week that the shift to the small car segment had been greater than it expected.

NISSAN'S TURN

Nissan Motor Co was the sole automaker to post gains, having launched a new March subcompact and Elgrand minivan, the first in a wave of new vehicles for the company.

It had few new models last year, when it concentrated on restructuring. Sales of ordinary cars edged up 2.9 percent, with overall sales up 10.5 percent on the success of its minivehicle Moco, which is outsourced from Suzuki Motor Corp.

"Up until now it's been Honda which has led growth, but from now on it's going to be Nissan," said Deutsche Securities analyst Tatsuo Yoshida.

Toyota Motor Corp saw its own-brand sales slide 4.2 percent, also hit by having comparatively fewer new models in the popular subcompact segment than last year.

Earlier this week, it affirmed its domestic full-year target of two percent growth, pledging new models and special limited editions of some vehicles.

But sales are down 6.4 percent for the year to date and analysts say Toyota's targets are looking increasingly unrealistic.

Group sales for Toyota, which include minicar unit Daihatsu Motor Co and truck maker Hino Motors Ltd, slid five percent.

Restructuring Mitsubishi Motors Corp, with no new models, reported a 19.1 percent decline in overall sales and announced the recall of 676,741 minivehicles in Japan due to a potentially defective battery box.

The nation's fourth-largest automaker is still working to overcome a major customer complaints scandal two year ago that resulted in the recall of almost two million vehicles worldwide.

Thursday's recall is estimated to cost six billion yen ($50.09 million), the company said.

Overall sales at Mazda Motor Corp, the smallest of Japan's top five automakers, fell 4.4 percent despite the recent launch of its new medium-sized sedan, the Mazda6.