New Models Help Japan October Auto Sales Rise

TOKYO, Nov 1, 2002; Chang-Ran Kim writing for Reuters reported that a raft of new models perked up Japanese vehicle demand in October compared with last year, when sales were also hit by battered consumer sentiment after the U.S. hijack attacks and economic worries at home.

After a surprising year-on-year rise in September for the first time in four months, industry-wide sales of new cars again rose in October, up 1.3 percent from a year earlier at 443,293 cars, data from the Japan Automobile Dealers Association and the Japan Mini Vehicle Association showed on Friday.

That was despite a 6.9 percent fall in sales of minivehicles, which have been enjoying stable demand due to tax breaks and looser parking restrictions. Sales of the vehicles, which have a maximum engine displacement of 660cc, totalled 131,777 units.

Analysts said monthly sales figures will probably continue to rise from year-ago levels on and off for the next six months or so, but that this would not indicate a strong rebound in demand.

Rather, any bounce would be in response to especially weak demand last year and would only signify a return to where the market had been a few years ago.

"This is not a trend. The rise is a function of the market being particularly weak last year," said Christopher Richter, auto analyst at HSBC Securities.

"The Japanese market seemed to react more negatively to the September 11 attacks than the U.S. market did," he added.

Sales of ordinary vehicles rose 5.2 percent year-on-year to 311,516 units, although that was down sharply from the 388,018 units sold in September.

The rise in Japanese sales contrasts sharply with an expected drop in U.S. auto demand for the same month. Analysts are forecasting a drop by about a quarter from last year, when sales hit a record high thanks to the use of interest-free loans.

MAZDA LEADS RISE

Mazda Motor Corp, Japan's fifth-largest automaker, enjoyed the sharpest jump of 10.7 percent in regular car sales, helped by the launch in August of the remodelled Demio subcompact after a drought of new models last year.

Next in line was industry leader Toyota Motor Corp, whose own-brand sales surged 9.6 percent, followed by Nissan Motor Co, which posted a 6.4 percent rise thanks partly to the launch of the new Cube early in the month.

Mitsubishi Motors Corp, Japan's fourth-largest automaker, bucked the trend, marking a 22.7 percent drop in sales.

The automaker has had no major new models this year, but is counting on the new Colt, due for release this month, to reverse the course of dwindling sales.

Honda Motor Co's sales were flat as the automaker continues to face difficulty in building on last year's big gains led by the popular Fit subcompact.