"Abenomics is not having clear traction across the country," warned the head of Japan's auto lobby on Thursday as unexpectedly weak domestic sales revealed - yet again - what an utter disaster government policy is. "We feel a sense of crisis about the fact that cars are actually not selling," he exclaimed, saying that, as Reuters reports April sales tax hike was only partly to blame for the domestic sales weakness, citing the government's failure to boost consumption. But, but, but Japanese stocks are up 1000 points in the last 2 days so how can this be?
The head of Japan's auto lobby on Thursday said a "sense of crisis" hung over the industry, with unexpectedly weak domestic sales revealing the failure of government stimulus policies and currency turmoil hitting key export markets.
Japan Automobile Manufacturers Association (JAMA) Chairman Fumihiko Ike said an April sales tax hike was only partly to blame for the domestic sales weakness, citing the government's failure to boost consumption.
"We are seeing continued weakness in domestic new car sales that go beyond a backlash to the April sales tax hike," he said, adding that new car sales were down by double digits after the tax hike.
Both Toyota and Honda cut their domestic vehicle sales targets when they announced their second-quarter results in November and October respectively.
Ike, who also serves as Honda chairman, said Prime Minister Shinzo Abe's stimulus policies - known as Abenomics and designed to end years of deflation - had failed to encourage spending on big-ticket items like cars.
"Abenomics is not having clear traction across the country and even though as an industry we benefit from the weaker yen, we feel a sense of crisis about the fact that cars are actually not selling," he said.
Don't worry - next quarter will be great... Aso, Kuroda, Abe, and Suga all promised...
Ike also said plunging emerging-market currencies were having an "undeniable" impact on Japan's auto sector.
Automakers could be hit hard by the erosion of purchasing power in key emerging markets, such as Russia, where the rouble dived as much as 20 percent against the dollar earlier this week and is down by some 50 percent against the U.S. currency so far this year.
Asian automakers see Russia as a particularly attractive market, and the currency volatility struck just as they were ramping up their presence in the country.
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So not "unequivocally good" for the world economy then?