Friday, October 26, 2007

Honda lower its domestic sales forecast

Honda may trim its Japan sales forecast for this year, a company executive said Thursday, the latest sign of a stagnant home market for the world's most profitable automakers.

Last week, Toyota Motor Corp, which makes Camry sedans and Lexus luxury cars, lowered its 2007 Japan sales forecast, while maintaining its overall global sales target.

Honda Motor Co vice president Koichi Kondo told reporters it was "likely" the forecast for Japan sales will be reduced from the current projection for 660,000 vehicles - which already represents a 1.8% drop from the previous year.

Toyota president Katsuaki Watanabe said last week that overseas sales, including regions such as the Middle East, Southeast Asia and Russia, will make up for the expected drop in Japan sales.

Toyota now expects domestic sales of around 1.65mil vehicles for this year, lower than the initial projection for 1.72mil vehicles.

The Japanese auto market has been stagnant in recent years.
One major problem is that public transportation is so good in Japan's urban areas, traffic congestion so bad and parking so expensive that car owners here are generally weekend drivers.
Analysts cite other reasons, including declining paychecks and an overall demographic shift toward lower birth rates, that have reduced prospective buyers. Youngsters aren't interested in cars, they say, but instead spending money on cell phone bills and gadgets.

Even Toyota and Honda, Japan's No. 1 and No. 2 automakers, which have mostly scored success in global sales, are struggling to woo customers in Japan.

No comments: