Japan car sales rise

Japanese buyers sought out new compact models

Japan's three largest vehicle makers reported stronger car sales in the domestic market in August year-on-year, boosted by the popularity of compact new models.

Exports were also up for two of the top three firms, Honda and Toyota, but Japan's biggest car maker, Nissan, posted a decline in overseas sales.

"For Toyota and Honda, the general direction, at least until September 11, continued to have a relatively robust outlook", said Clive Wiggins of Commerzbank Securities in Tokyo.

However, future prospects will depend partly on whether US consumer confidence is dented by the 11 September terrorist attacks on New York and Washington.

Initial data released on 25 September showed the biggest fall in US consumer confidence since October 1990.

Upbeat on outlook

Auto analysts in Tokyo were optimistic that the impact would be short-lived.

"I don't expect a prolonged impact", said William Nestuk of West LB Panmure. "Certainly the figures for September will be hurt, but they won't be hurt severely."

Honda had the strongest performance and its shares leapt more than 10% on the news. Japan's third largest vehicle maker posted a 19.6% year-on-year increase in domestic sales in August to 56,362 vehicles. Exports were up 4.4%.

"We introduced a passenger car called Fit in June and that car really lifted our domestic sales", a Honda spokesman said.

For Toyota, sales in Japan were 4.1% higher than August 2000, at 106,883, and exports rose 1.2%, the first increase in three months.

Nissan, Japan's biggest car maker in which Renault has a 36.8% stake, rose only 0.4%, while exports fell 3.4%.

Mitsubishi Motors' Japanese sales plunged 14.2% and Mazda, which is majority-owned by Ford, fell 8%.

Isuzu to cut US output

Overall, vehicle production rose 1.7% on August 2000, according to the Japan Automobile Manufacturers' Association. It was the first increase in output in seven months.

Loss-making Isuzu Motors, which is 49% owned by General Motors, said it will temporarily reduce its output in the United States by 20% due to falling sales.

The firm's plant in Layette, Indiana, will cut production of sports utility vehicles by 1,600 a month, at least until December, a company spokesman said.