Just like the player character after dying several times in the "Dark Souls" series, Japan may find itself hollowing out as a result of the country's declining auto market.
Bloomberg reports 333,471 deliveries were made in August, the fewest since the same month in 2011, with sales of kei cars leading the way down at a decline of 15 percent after cushioning demand for the past few months; the overall decline for August 2014 was 9.1 percent.
The decline may only be the beginning, however, according to analysts at IHS Automotive, Advanced Research Japan and Barclays Plc. Despite a weakened yen, recent increases in Japan's consumption tax knocked down demand for new vehicles. In turn, automakers are keeping annual production at low levels for the local market, while capital expenditure will fall 7.9 percent for FY 2014, 1.3 percent in FY 2015.
Should the trend continue, the Japanese economy as a whole could follow the automotive industry into a hollowed out new "lost decade," undoing Prime Minister Shinzo Abe's attempts to revive it, such as the aforementioned weakening of the yen. Production is predicted to decline by 1.6 million units in the coming decade while global production climbs to 22 million by 2021, according to IHS Automotive.
The post Japanese Auto Industry, Economy In Danger Of Hollowing Out appeared first on The Truth About Cars.
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