Japan new vehicle sales fall by record 51% in April

TOKYO (AFP) – Japan's domestic sales of new cars, trucks and buses logged their biggest-ever drop in April, an industry group said Monday as the March quake and tsunami hit production and supplies to dealers.

The sales came to 108,824 units in April, down 51 percent from a year earlier, the Japan Automobile Dealers Association said.

The drop, far steeper than a 37 percent fall in March, was the biggest since the data began being recorded in 1968. The previous record fall was 45.1 percent in May 1974 when Japan was reeling from the oil crisis.

Auto sales plunged in April as automakers were forced to halt factory lines with parts supply disrupted in the aftermath of the devastating March 11 earthquake and tsunami.

Factories have since resumed production but the association was cautious about sales from May onwards. Analysts say a parts supply shortage that has strangled production may last for months.

"Factory lines started moving again but they are not operating fully yet. We are likely to continue feeling the impact (of the disaster)," a spokesman at the association said.

The official said auto sales were down because the supply of new vehicles had been hit as a result of the March 11 disasters, amid dampened consumer sentiment.

Japan's biggest recorded quake and the tsunami it unleashed shattered supply chains and crippled electricity-generating facilities, including a nuclear power plant at the centre of an ongoing atomic emergency.

Many key component manufacturers are based in the worst-hit regions and suffered damage to their facilities from the 9.0 magnitude earthquake or were inundated by the giant wave that followed.

Sales of Toyota Motor vehicles dropped 68.7 percent to 35,557 vehicles in April. Nissan Motor vehicle sales tumbled 37.2 percent to 17,413 in the month, while Honda sales dived 48.5 percent to 18,923.

Last week data showed a 15.3 percent dive in Japan's industrial production in March on-month, the sharpest since records began in 1953, due mostly to crippled vehicle production.

Consumer sentiment has also plunged. Japanese household spending plunged by 8.5 percent in March from a year earlier in the biggest drop since records began in 1964, separate data showed last week.

Although sales of water and food surged as people stockpiled immediately after the quake and the nuclear crisis at the Fukushima Daiichi plant, consumers have held off spending on non-essential items.

With sales of japanese cars plummeting because of unforeseen circumstances, will the price of the current stock of vehicles possibly rise to offset the limited supply available. Could this possibly open the doors for a wider selection of european cars to be allowed into the united states, as many get better fuel mileage than what's currently available today. How will the big three respond, while their japanese counterparts gradually recover from their unspeakable tragedy. Will the level of quality still improve along with reliability to re-ensure consumers they're actually getting a solid deal. 

This unexpected window of opportunity for the big 3 auto dealers, better have them take advantage while they're able to, by not letting up on the manufacturing quality or a repeat of history could happen  again. Anyone old enough to remember the 1970's when 8 gallon gas rations were in effect while Jimmy Carter was president, ought to remember that was how the japanese dealers gradually over took the big 3 dealers in all aspects. With the current rise of fuel prices, it may behoove the u.s government to allow more european cars into the united states to see how they measure up. 

Gasoline prices are setting records across Europe and exceeding $4 a gallon in California as the rise in crude oil caused by the conflict in Libya punishes companies and consumers.

If Europe or the US was on a rampage with credit expanding wildly it would be a different matter. However, credit expansion is not happening in the US or Europe.

Dumb things happen (in both directions) when central-planning jackasses view inflation in terms of prices rather than money supply and credit, then take (or fail to take) action because of prices.

For example, Greenspan ignited an enormous housing bubble by failure to consider reckless credit expansion. Instead, Greenspan foolishly focused on the CPI which suggested low inflation.

Such policies have central bankers forever-chasing their tails. The free market, not a bunch of bureaucrats, should set interest rates. None of the central bankers saw this crisis coming, so how the hell do they think they know what interest rates should be?