Well, the headline figure may not seem that great, but the year-on-year decline in new car sales of 14.3% in February is actually a sign of a continuing turnaround in Japan’s new car market. In January, the year-on-year decline was 21.5%, and the same figure for November 2010 was 30.7% decline, so we really do seem to be seeing the rate of decline slowing.
Although we can hardly say that the car market in Japan is vibrant, the signs of the turnaround are positive. Not just for the manufacturers, but also for businesses like ours that source cars from Japan’s used car auctions. After all, a new car sale usually means a used car trade in. And now that the Japanese government is not paying to take “clunkers” off the road when consumers buy new cars, these trade ins are again being fed directly into the pool of cars at the auctions. Better new car sales means more choice for our customers. (Not that 20,000 to 30,000 vehicles per day is a poor choice – far from it – but it does not match the over 50,000 vehicles we would see on some days back in 2006 or 2007.)
We will keep monitoring this situation with the expectation that the Japanese economy will continue to recover and drive more new car sales – and more cars in Japan’s car auctions.
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