Sunday, September 17, 2006

Slow Car Sales in Japan -- Why?
A little while back Business Week ran a piece on how car sales in Japan have been lackluster. Given the improved Japanese economy, sluggish auto sales are indeed a surprising phenomenon.
According to the Japan Automobile Dealers Assn., total passenger car sales fell 1%, to 3.07 million units during the first six months of 2006. Strip out mini-vehicles—low margin, tiny cars limited to 660cc engines—and the figures are worse: down 3.8%, falling below 2 million units for the first time in 23 years.

The article says no one seems to have a clear idea of why sales are so dim.

Why anyone would want to own a car in Japan -- at least in the major metropolitan areas -- has always been puzzling for foreigners. Roads are jammed, gas is expensive, and public transportation takes you most anywhere you want to go comfortably and reliably.

The article touches on several possible reasons for the decline -- a decreased emphasis on market share by Japan's carmakers, a lower birth rate, a changing income distribution. Discussing the phenomenon with friends in Japan, I have heard related or different social/cultural reasons for low car volume:

  • The social norm of the Japanese nuclear family is changing, with many men and women not marrying until well into their 30s or not at all, and women pursuing careers more actively. With fewer traditional families, the need for Dad to buy a car to maintain the status of the family (and his own) has been diminished.
  • The percentage of the workforce that are "freeters" -- temporary employees -- has grown enormously, accounting for 20% or more of staff at large Japanmese companies. These workers do not have the job security that would allow them to purchase an auto.
  • Video games and other consumer electronics sompete with autos more vigorously for the attention of young Japanese guys. They may be more interested in the latest video game than the latest car model, thus making a lifelong love affair with autos that supports new car sales less likely.

It could also be that many Japanese have finally realized that they don't really a need a car.


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