Japanese Auto Production Looking Up

11/27/96

Reuters has reported that Japan's vehicle production rose 12.3 percent in October (compared to October 1995). The rise marks the second successive monthly hike in production. A manufacturer's group noted on Monday that Japanese automobile production is likely to climb for the year as a whole, ending a five year slump.

The Japan Automobile Manufacturers Association (JAMA) reported that overall vehicle production rose to 941,461 for October. It was bolstered by strong domestic demand (up 5.8 percent, year on year, to 575,672 vehicles) and revived exports (up approximately 17 percent). An association official said, "Japan's annual vehicle production in 1996 will exceed the level of 1995 because domestic demand still remains strong and the export environment has improved because of the weaker yen."

Annual vehicle production in Japan has fallen for 5 straight years, culminating with a 3.4 percent drop in 1995 to 10.2 million units. Between January and October this year, domestic production totaled 8.57 million vehicles, up 0.1 percent over the same period in 1995. JAMA predicts that the gains will continue during the last two months of the year because of the weaker yen and stronger domestic demand.

Strong demand for recreational vehicles led all Japanese automobile manufacturers, except Nissan and Isuzu to up production in October. Toyota's output rose 20.2 percent to 337,181 vehicles, while that of Honda jumped 40.3 percent. Mitsubishi's production was up 6.2 percent.

Nissan lost out in the domestic demand department because a "new model effect" wore off several vehicles it introduced last year. Isuzu's exports dropped due to the effects of Consumer Reports mid-September article about the Trooper's propensity to tip over. Of course, Isuzu Motors America Inc says the tests were flawed and that demand for the Trooper is bouncing back.

Paul Dever -- The Auto Channel