Japan's Feb. new auto sales plunge 32.4%, largest drop since May 1974+

TOKYO, March 2 Kyodo - Domestic sales of new vehicles plunged 32.4 percent in February from a year earlier to 218,212 units, the largest drop since May 1974 when the first oil shock affected vehicle sales, as consumers increasingly refrained from big-ticket purchases amid the deepening global economic slump, an industry body said Monday.

The total number of cars, trucks and buses sold in February represented a 57
percent drop from the peak in February 1997 when car sales picked up ahead of a
hike in consumption tax from 3 percent to 5 percent in April of that year, the
Japan Automobile Dealers Association said.
The association's latest data showed the seventh consecutive monthly decline in
domestic vehicle sales, excluding minivehicles with engine displacements of up
to 660 cc.
Referring to the prospects for a recovery in the domestic auto market, Takeshi
Fushimi, the association's director, told reporters, ''It's totally
unforeseeable.''
''It is vital to urgently implement measures to restore consumer sentiment
toward vehicles,'' he said, stressing the need for automakers to accelerate
development of fuel-efficient cars, like Honda Motor Co.'s hit Insight hybrid
model, to combat current conditions.
All of Japan's 12 automakers covered by the statistics suffered double-digit
declines in sales except for Daihatsu Motor Co., which saw auto sales fall 2.8
percent to 718 units.
Of Japan's top three automakers, Honda saw a milder decline than Toyota Motor
Corp. and Nissan Motor Co.
Toyota, Japan's largest automaker, sold 98,808 units, excluding Lexus brand
cars, down 32 percent from a year earlier.
Honda, Japan's second-largest carmaker, sold 30,101 cars, down 21.1 percent,
and third-largest Nissan sold 40,694 units, down 35.2 percent.
Among the hardest-hit automakers, Mitsubishi Motors Corp. suffered a 50.5
percent plunge in sales to 3,880 units and Mazda Motor Corp. saw a 40.5 percent
drop in sales to 11,312 units.
By vehicle type, passenger car sales dropped 32.2 percent to 194,236 units for
the seventh consecutive monthly decline, while truck sales fell 35.2 percent to
22,693 vehicles for the 29th straight month of decline. Bus sales slipped 3.7
percent to 1,283 units.
Sales of smaller cars also declined at an accelerated pace in February.
According to the Japan Mini Vehicles Association, domestic sales of
minivehciles fell 9.8 percent from a year earlier to 162,370 units, marking the
largest drop since December 2007 and the fourth consecutive monthly decline.
Japanese automakers have been hammered by weakening demand and the yen's steep
appreciation against other key currencies, with Toyota and Nissan both
expecting to fall into the red in the current business year ending March 31.
Honda is expecting to eke out a group net profit of 80 billion yen for fiscal
2008, which represents an 86.7 percent plunge from the previous year.
Earlier this year, Toyota and Honda announced the replacement of their
presidents in an effort to recover from deteriorating earnings under younger
leadership.
Fushimi said the dealers' association will be carefully watching sales in
March, which tends to be the best month for sales on demand growth ahead of the
April start of the new Japanese business year.
But industry analysts warned that consumers may hold off purchasing cars this
month as tax breaks for environmentally friendly cars are planned in tax
amendment bills for fiscal 2009 starting April 1.