* See the Top 189 All-local models by clicking on the title *
Today at BSCB we can share with you an exclusive All-local models ranking by variant (Corolla Axio and Corolla Fielder separated for example), and the analysis of this sales charts comes to you courtesy of Japanese market specialist Stephen Bloom, starting with the Top Events of 2014 in Japan and continuing onto a view towards the near future of the Japanese market.
Top Events of 2014
1. Consumption Tax Increase
As has been mentioned many times the most impactful event for Japan’s auto market was the increase of the national consumption tax rate from 5% to 8% on April 1 (the beginning of Japan’s fiscal year). Heeding some dire predictions of double digit drops, automakers did their best to push out some major new models before the tax hike. Consumers also scrambled to make big purchases like automobiles that pushed first quarter sales to levels not seen in a decade. After the tax increase sales did drop precipitously, but buy the end of the year things had pretty much stabilized and in the end annual sales were up 3.5% in thanks primarily to one segment in particular…
2. Kei Shift
2014’s growth was primarily to a class of vehicles that seldom seen outside of Japan, the kei car. The word kei in Japanese means “light” and these cars are not only light but tiny owing to strict regulations of both their exterior dimensions and engine displacement (660cc). In exchange they benefit from a lower taxes compared to larger vehicles which has made them enormously popular. Sales of kei cars reached an all time record of 2.3 million units that accounted for 40% share of the total vehicle market. That share has increased almost 3% per year for the past couple years, but 2015 may change all that. The government, concerned that auto manufacturers are focusing too much development on a class primarily geared for the domestic market, is introducing higher kei car taxes on April 1 to bring them more in line with traditional vehicles. This is highly unpopular with consumers and automakers alike, but I do not see it being a death knell to the segment as they will remain among the most affordable and fuel efficent vehicles on the market.
3. SUV Surge
In a country where small cars and minivans dominate the roadways the fastest growing segment was neither of these but SUVs (and note that this terminology is used in Japan for vehicles that are predominately crossovers). Sales of SUVs were up 62% over 2013 overtaking both sedans and hatchbacks in popularity following the trend seen in other markets. We saw some major debuts in this segment, such as the all new Honda Vezel and Lexus NX, as well as the redesigned Toyota Harrier and Nissan X-Trail. The trend even extended into the kei segment with the popular Suzuki Hustler. I expect the SUV surge to continue as Mazda debuts the CX-3 this spring and Toyota is surely developing a smaller crossover of its own to compete with the Vezel.
4. Next generation fuel vehicles
Japan has always been at the forefront of emerging technology and this is reflected in the highest penetration of alternative fuel vehicles in the world. Since the Japanese government introduced tax incentives for “next-generation” vehicles in April 2009 hybrids models have dominated the charts with the third generation Toyota Prius and Toyota Aqua leading the charge. 2014 marked some major milestones for the HV-EV market. For the first time annual domestic sales exceeded 1 million thanks to it also being the first time that all all eight major manufacturers offer hybrid vehicles in their lineup. Sales were up 10% in 2014 accounting for 22% of all passenger vehicle sales. Likewise the number of HV-EV models available has more than tripled in the last 5 years from only12 models in 2009 to about 50 at present. Japan’s incentives for next generation vehicles apply not only to hybrids and electric vehicles but also to clean diesel vehicles. This year also saw the debut of the Toyota MIRAI, a hydrogen fuel cell vehicle that adopts its name for the Japanese word meaning “future”.
5. Foreign brands continue to rise
Although foreign brands account for only about 6% of Japan’s car sales, 2014 marks the 5th consecutive year that sales of foreign automakers have increased. There were 290,196 new registrations this year, behind only 1996 and 1997, the years immediately preceeding the Asian Financial Crisis. Most foreign brands saw record-breaking numbers in 2014, including 4 of the top 5 brands. The top 5 brands have been all German since Mini outpaced Volvo in 2006 and this was again the case in 2014. The new Jeep Cherokee helped Jeep widen its lead over Ford as the top-selling American brand. The VW Golf led sales with 31,410 units which if included among JADA’s model rankings would have placed it at #25 ahead of the Subaru Levorg. The Golf also was the first non-Japanese car to win the Japan Car of the Year award (2013-2014).
Toyota remains the dominant player by far, but also was the brand most affected by the shift to kei cars. Toyota’s share of the total passenger market slipped 2% though admittedly this was partially offset by a 1% gain for subsidiary Daihatsu. 2015 should be a big year for Toyota as the 4th generation Prius is scheduled to debut as well as the new Alphard and Vellfire.
Honda solidifies its place as Japan’s second best-selling with the revamp of one of its core models the Honda Fit and the addition of its crossover brother Vezel. Honda will continue to revamp the remainder of its lineup with the next generation Freed, StepWGN and Legend as well as new models Jade and S660. Honda also completed its new “N” series kei lineup with the addition of the N-WGN and N-BOX Slash. Honda is now the third best-selling maker of kei cars behind only Daihatsu and Suzuki, both of which are primarily kei manufacturers.
The analysis continues below.
Previous FY14 post: Japan Full Year 2014: Kei cars surge, Daihatsu Tanto above Toyota Aqua
Previous year (Kei): Japan Kei cars Full Year 2013: Honda N-BOX takes control
Previous year (imports): Japan Imports Full Year 2013: BMW 3 Series up 69% to #2
Complete analysis, FY 2014 Top 189 All-local models vs. FY2013 figures below.