Tokyo / Seoul: Japanese auto sales jumped by a quarter in March to cap a business year that relied heavily on government incentives, while South Korea’s Hyundai Motor continued to rack up impressive sales growth, sending its shares to a record high.
With demand expected to shrink as more Japanese move to urban areas well served by public transportation, local automakers such as Toyota Motor Corp, Honda Motor Co and Nissan Motor Co are turning to overseas markets for growth.
But they face tough competition from Hyundai, whose sales in March defied the end of government subsidies at home to surge by more than a third globally thanks to new model launches and strong overseas demand.
“South Korean automakers are simply doing superbly,” said Kang Sang-min, an analyst at Hanwha Securities. “March seasonally is not a strong month, but they still managed to post such strong rises thanks to good new models and lagging performance by competitors like Toyota.”
Shares in Hyundai, with affiliate Kia Motors the world’s fourth-largest automaker, jumped as much as 5.6% to match the record high they hit last December.
Japanese auto shares were little moved, with the transport equipment sub-index dipping 0.2%.
“Nothing to rejoice” in Japan
Led by Toyota, Japanese sales of new cars, trucks and buses, including 660cc minivehicles, soared 24 percent last month to 674,494 vehicles, helped by an extra selling day compared with last March.
Toyota’s March sales, excluding minivehicles, rose 53% in Japan, where its recalls have been limited to braking glitches on new hybrid models such as the latest Prius. Nissan sales rose 24% and Honda’s gained 34%.
Annual Japanese sales grew 10% to 3.182 million vehicles for the business year that ended on March 31, marking the first double-digit rise in two decades.
But officials said the 12-month tally was still the fifth-lowest on record, bouncing back from an especially weak, crisis-hit year with the help of tax incentives and subsidies on low-emission cars since last year.
“These figures are nothing to rejoice about,” said Michiro Saito, an official at the Japan Automobile Dealers Association.
Demand in the 2010/11 business year is expected to fall 4.9% to 4.65 million vehicles, the Japan Automobile Manufacturers Association said last month, in what would mark a 33-year low.
US, China eyed
Hyundai said it sold 317,973 vehicles last month, up 36% from a year ago. Affiliate Kia sold 173,095 units in March, up 55%.
The monthly results eased concerns that aggressive discounting from Toyota could put a dent in Hyundai’s sales growth in the United States.
The upgraded Sonata sedan and Tucson SUV led Hyundai’s growth, bringing its US plant in Alabama to run nearly at full capacity for the first time since production began in 2005, analysts said.
Analysts said the industry would likely post a sharp rise in US auto sales in March, supported by hefty incentives to match Toyota’s as the Japanese automaker sought to repair an image tarnished by a series of recalls.
Demand is also expected to have soared in China in March, fuelled by a humming economy and policy incentives. Three analysts surveyed by Reuters expect a 30-40% rise in monthly sales, due for release next week.