April 11, 2018

Forecast for Japan’s Motor Vehicle Demand in Fiscal Year 2018

I. Passenger Cars and Commercial Vehicles

Overview: Total Demand for Passenger Cars and Commercial Vehicles
1) Total demand for passenger cars and commercial vehicles in Japan in fiscal year 2017 (ending March 31, 2018) is expected to finish at 5.19 million units, an increase of 2.2% from the previous fiscal year, with sales of passenger cars and CVs, excluding mini-vehicles, totalling 3.34 million units, down 0.7% from fiscal 2016, and sales of mini-vehicles reaching 1.86 million units, up 7.9%. The projected decline in fiscal 2017 in sales of passenger cars and CVs, excluding mini-vehicles, is attributable to the waning impact of new models introduced to the market and to the revelation of flawed vehicle inspection procedures, while the projected increase in mini-vehicle sales is attributable to the introduction of new models to the market.
2) For fiscal 2018, total demand for passenger cars and commercial vehicles is forecast at 5.18 million units, a decline of 0.3% from the previous fiscal year, with sales of passenger cars and CVs, excluding mini-vehicles, totalling 3.34 million units, on a par with the level projected for fiscal 2017, and sales of mini-vehicles finishing at 1.84 million units, down 0.9%.

1. Standard and Small-Sized Passenger Cars
1) Sales of standard and small-sized passenger cars in fiscal 2017 are expected to total 2.90 million units, down 3.0% from the previous fiscal year, with the factors behind this projected decline being the waning impact of new models introduced to the market and the revelation of flawed vehicle inspection procedures.
2) Demand in this category in fiscal 2018 is forecast at 2.91 million units, up 0.4% from fiscal 2017, owing to the projected gradual expansion of Japan’s economy.

2. Mini Passenger Cars
1) Sales of mini passenger cars in fiscal 2017 should finish at 1.45 million units, up 8.6% from fiscal 2016, attributable to the introduction of new models to the market and the waning relevance of a vehicle fuel efficiency issue that arose in fiscal 2016.
2) Despite the anticipated waning impact of new models introduced to the market, demand for mini passenger cars in fiscal 2018 is forecast at 1.46 million units, up 0.3% from fiscal 2017, attributable to the projected expansion of the national economy.

3. Standard Trucks
1) Sales of standard trucks in fiscal 2017 are projected to reach 173,000 units, down 2.7% from fiscal 2016, attributable to the enforcement of more stringent emissions regulations in the second half of fiscal 2017. Of that projected total, sales of medium- and heavy-duty trucks are estimated at 92,000 units, down 6.7% from fiscal 2016.
2) Notwithstanding the projected gradual expansion of the economy, demand for standard trucks in fiscal 2018 is forecast at 167,000 units, a drop of 3.5% from fiscal 2017, reflecting the continued impact of stricter emissions regulations enforcement. Of that projected total, demand for medium- and heavy-duty trucks is forecast at 87,000 units, down 5.4% from fiscal 2017.

4. Small Trucks
1) Sales of small trucks in fiscal 2017 should total 250,000 units, a decline of 3.3% from the previous fiscal year, reflecting factors such as the decrease in the number of small commercial enterprises and the decline in transport demand.
2) Small truck demand in fiscal 2018 is forecast at 248,000 units, down 0.8% from fiscal 2017, attributable to the continued impacts of the aforementioned structural factors.

5. Mini-Trucks
1) Sales of mini-trucks in fiscal 2017 are projected to finish at 403,000 units, up 5.4% from fiscal 2016, a result of the recovery made from the April 2016 Kumamoto Prefecture earthquake’s negative impacts on production.
2) Demand for mini-trucks in fiscal 2018 is forecast at 383,000 units, down 5.0% from fiscal 2017, attributable to the continuing decline in the number of users in the small-business and farming-household segments.

6. Large Buses
1) Sales of large buses in fiscal 2017 should total 5,700 units, a drop of 17.1% from fiscal 2016, attributable to the enforcement of more stringent emissions regulations in the second half of fiscal 2017.
2) Despite the projection that transport demand in the touring bus segment will remain robust, demand for large buses in fiscal 2018 is forecast at 4,900 units, a decline of 14.0% from fiscal 2017, reflecting the continued impact of stricter emissions regulations enforcement.

7. Small Buses
1) Sales of small buses in fiscal 2017 should reach 8,900 units, up 1.4% from fiscal 2016, attributable to sustained robust transport demand and to buoyant replacement demand.
2) Demand for small buses in fiscal 2018 is forecast at 8,200 units, a drop of 7.9% from fiscal 2017, reflecting an abatement in replacement demand.

II. Motorcycles

Overview: Total Demand for Motorcycles
1) Total demand for motorcycles in Japan in fiscal year 2017 (ending March 31, 2018) is projected at 375,000 units, a slight increase of 0.4% from fiscal 2016, attributable to a boost in last-minute demand for models scheduled to be phased out as a result of the need to comply with new emissions regulations.
2) Although the introduction of new models to the market is expected to stimulate demand, total demand in fiscal 2018 is forecast at 361,000 units, a decline of 3.7% from fiscal 2017, attributable to the aforementioned enforcement of new emissions regulations.

1. Class-1 Motor-Driven Cycles (50cc & under)
1) Sales of Class-1 motor-driven cycles in fiscal 2017 should reach 166,000 units, down 1.3% from the previous fiscal year. Although a last-minute spike in demand is anticipated for models scheduled to be phased out because of the need to comply with new emissions regulations, overall demand for Class-1 motor-driven cycles in fiscal 2017 is projected to decline from fiscal 2016, reflecting structural factors such as the advanced ages of current users and the decline in the youth demographic.
2) Demand in fiscal 2018 for Class-1 driven motor-driven cycles is forecast at 142,000 units, a decline of 14.5% from fiscal 2017, reflecting a drop following the projected spike in demand at the end of fiscal 2017 as well as an anticipated shift in demand to Class-2 motor-driven cycles and the long-term decline attributable to the aforementioned structural factors.

2. Class-2 Motor-Driven Cycles (51cc-125cc)
1) Sales of Class-2 motor-driven cycles in fiscal 2017 are expected to finish at 86,000 units, down 12.1% from fiscal 2016, attributable to fewer models (including fewer flagship models) in model lineups as a result of mandatory compliance with new emissions regulations.
2) Demand in this category in fiscal 2018 is forecast at 99,000 units, up 15.1% from fiscal 2017, attributable to the anticipated shift in demand from Class-1 to Class-2 motor-driven cycles and the introduction of new models to the market.

3. Mini-Sized Motorcycles (126cc-250cc)
1) Sales of mini-sized motorcycles in fiscal 2017 should total 58,000 units, representing a substantial increase of 26.0% from fiscal 2016, attributable not just to a rush in last-minute demand for models scheduled to be phased out owing to the enforcement of new emissions regulations, but also to the introduction of new models to the market.
2) Demand in this category in fiscal 2018 is projected at 56,000 units, a drop of 3.4% from fiscal 2017, reflecting a drop following the projected spike in demand at the end of fiscal 2017 and the enforcement of new emissions regulations.

4. Small-Sized Motorcycles (over 250cc)
1) Sales of small-sized motorcycles in fiscal 2017 should total 65,000 units, up 5.7% from fiscal 2016, attributable to stable structural factors (continuing demand from long-time users and from users returning to motorcycle ownership after a hiatus), a rush in last-minute demand for models scheduled to be phased out because of the need to comply with new emissions regulations, and the introduction of new models to the market.
2) In fiscal 2018, despite the anticipated continued stability of the aforementioned structural factors, sales of small-sized motorcycles are forecast at 64,000 units, down 1.5% from fiscal 2017, reflecting the waning impact of new models introduced to the market and the continued shrinking of model lineups.

[Data chart attached (PDF)]