Auto demand in Asia seen slowing

Reuters: Japanese auto sales fell by a third in May, the lowest total for that month since 1968, as car makers suffered from the impact of the earthquake and tsunami that roiled the country in March.

South Korean rivals, on the other hand, continued to gain traction with Hyundai Motor and affiliate Kia Motors posting double-digit growth in sales driven by solid demand for new models while their Japanese competitors have been forced to slash production globally.

Despite the ninth consecutive drop in monthly new vehicle sales, Japanese car makers are recovering faster than expected with market leader Toyota Motor expecting its output to return to 90 per cent of its pre-quake levels by this month.

Still, overall production in 2012 could be almost a million vehicles less than Toyota had planned to build at the start of the year. Lost output by the end of May was 900,000 cars.

Nissan Motor Co and Honda Motor Co have also said they are working to bring production back to pre-quake levels as soon as possible, most likely during the financial third quarter from October-December.

“The earthquake put a chill on consumption in Japan,” Michiro Saito, general manager of the Japan Automobile Dealers Association said on Wednesday. “Production will return to normal from June and that may provide a boost to sales.”

Sales of vehicles, excluding 660cc minicars in Japan, fell 37.8 per cent from the year before to 142,154 units last month. Toyota, the world’s biggest automaker, led the drop with a 56.6 per cent fall. Combined with 660cc vehicles, tallied separately, new vehicles sales in the world’s third-biggest auto market declined 33.4 per cent to 237,364 vehicles, data showed on Wednesday.

India’s largest automaker, Maruti Suzuki, posted its slowest growth rate in more than two years, with a 1.9 per cent rise in total sales to 104,073 units.

Indian automakers overall sold 162,825 units in April, up 13 per cent from a year ago, the slowest pace in nearly two years.

India’s third largest two-wheeler maker, TVS Motor, posted an 18 per cent jump in May sales to 185,930 units, a record for the company.

Tata Motors, India’s largest truck and bus maker posted a 10 per cent rise in May sales, driven by an 84 per cent rise in sales of the Tata Nano, touted as the world’s cheapest car.

Vehicle sales in India, one of the fastest-growing auto markets in the world, grew a record 30 per cent in 2010 as the burgeoning middle class in Asia’s third-largest economy spurred demand. That growth is expected to halve to 12 to 15 per cent this year.

South Korea’s Hyundai and sibling Kia, which rank fifth in global car sales, saw robust sales growth in May. Hyundai’s sales climbed 13.6 per cent, while Kia’s sales soared 22 per cent as a jump in its overseas sales offset a dip in sales at home.