Abenomics Fail: Japanese Auto Demand Drops Most In 3 Years

Tyler Durden's picture

Over a year after Shinzo Abe unveiled his devalue-the-currency three arrows plan to save his demographically-challenged and debt-riddled nation from a third lost decade... and aside from a stock market that soared as the currency collapsed - the Japanese people have little (or worse less) to show for it. As MarketWatch reports, Japan Automobile Manufacturers Association said Thursday that auto demand in Japan is expected to drop 9.8% in 2014 as the sales tax increase in April will dent consumer sentiment. The decline will be the first and sharpest drop in three years after auto demand remained nearly flat last year. It seems that 'recovery' will have to wait.

 

Japanese wage growth remains as stagnant as it was before Abe - despite the costs of most things rising in the nation thanks to a tumbling JPY...

 

and the balance sheet recession has left a nation minimizing debt as opposed to maximizing profit (or for people living standards via credit).

 

Via MarketWatch,

Japan Automobile Manufacturers Association said Thursday that auto demand in Japan is expected to drop 9.8% in 2014 as the sales tax increase in April will dent consumer sentiment.

 

The decline will be the first and sharpest drop in three years after auto demand remained nearly flat last year with a 0.1% rise.

 

JAMA expects auto demand to total 4.85 million vehicles this year, down from 5.38 million last year. This will be the lowest volume since 2011 when the industry was hit by an earthquake and tsunami. The association expects the reverse impact from the rush of car-buying ahead of the rise in Japan's sales tax rate to 8% from the current 5% in April to pull demand for the full year.

 

The expected weaker demand means little chance for car makers to lift domestic production led by domestic demand. The downbeat outlook comes as Prime Minister Shinzo Abe is asking Japanese companies to raise wage and invest more in the home market.

 

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