Japan Auto Production Unlikely to Reach 5 Million Cars in 2H

Japanese car production is sharply decreasing. Car sales are declining not only in North America, Europe and Japan but in emerging countries such as China, India and Russia. Japanese automobile production is unlikely to exceed 5 million cars in the second half of fiscal 2008 ending March 2009. Automakers’ output reductions largely effect steel and special steel makers’ productions. Japanese steel and special steel makers should adjust their outputs and inventories more than the present.

Japanese automakers’ annual output plans totaled 12.3 million cars at the initial of fiscal 2008, which shrank to 11.6 million cars at the end of October and 10.8 million cars at the beginning of December. Japanese automobile production decreased by 6.8% in October from a year earlier and the export downed by 4.2%, according to Japan Automobile Manufacturers Association. Both production and export represented year-on-year decrease since August 2008.

Japanese actual automobile output totaled approximately 5.8 million cars in the first half of fiscal 2008 (Apr-Sep). The output in the second half is estimated at around 5 million cars. However, the amount may become even less when automakers revise down their production plans day by day along the worldwide sales decline.

Japanese automakers’ output plans total approximately 2.65 million cars for October-December, down by 16% from a year earlier, and 2.35 million cars for January-March, down by 30%. Auto production would decrease during January-March when the output hit the seasonal peak in usual years.