Reuters: Most Read Articles: Japan's mini-car sales jump to record high

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Japan's mini-car sales jump to record high Apr 1st 2013, 13:00 By Yoko Kubota TOKYO, April 1 | Mon Apr 1, 2013 9:00am EDT TOKYO, April 1 (Reuters) - Sales in Japan of 660 cc passenger mini-cars jumped to a record high in the last financial year, signalling structural change in a market where family size is shrinking and buyers are shifting to smaller cars. Buyers and owners pay less tax for mini-vehicles, a category known as "kei" in Japan for cars that follow certain size and other criteria, than for bigger vehicles. Automakers sold a record 1.57 million passenger mini-cars in the year ended on March 31, up 23 percent from the previous year, industry data showed on Monday. Combined sales of mini-trucks, mini-vans and passenger mini-cars were 1.97 million vehicles, up 16.8 percent from a year ago and the second highest on record. That accounted for nearly 40 percent of the 5.21 million automobiles sold in the country in the year. Non-mini sales also rose, by 5.7 percent year-on-year helped by green car subsidies, but the share of minis in total sales extended a growth trend over the past two decades. Mini-vehicles must meet size criteria of 3.4 metres or less in length, 2.0 metres or shorter in height and 1.48 metres or narrower in width. The small size of mini-vehicles, which played a central role in Japan's motorisation in the late 1950s to 1970s, means they have little appeal outside of Japan, industry experts say. But within Japan, many small families are willing to buy them to save on costs associated with car buying and ownership. A mini-vehicle owner can save more than 20,000 Japanese yen ($210) just on the car ownership tax every year. Other taxes and costs such as insurance also tend to be cheaper. Changes in family structure have also helped increase sales. Twenty years ago, mini-vehicles accounted for about a quarter of the total sales. That grew to about a third 10 years ago and to 37.9 percent in the year ended on March 31. "In the past, mini-vehicles used to be among the various options. But as Japan goes through downsizing of vehicles, we are now starting to win customer understanding that they are the best," Suzuki Motor Corp Chairman Osamu Suzuki told reporters in February. Suzuki, together with top mini-car maker Daihatsu Motor Co , dominated the mini-vehicle market until last year, accounting for nearly 70 percent. Honda introduced the N Box mini-car in late 2011, however, and nearly doubled its share to 18.4 percent in the year ended March from 9.8 percent the previous year. "Honda has switched to placing more emphasis on mini-vehicles sales domestically, so that is a big factor," said Takaki Nakanishi, an auto analyst at Bank of America Merrill Lynch Global Research in Tokyo. ($1 = 94.0200 Japanese yen) (editing by Jane Baird) Link this Share this Digg this Email Reprints

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