Why cars don’t sell well in Japan

Why cars don't sell well in Japan Car

Car sales in Japan have continued to decline, and the lack of car sales has become a problem. Since 1950, the number of automobiles sold continued to increase, reaching its peak in 1990. Since then, the number of cars sold has been gradually declining, and has been on a downward trend in 2000. Even the largest domestic automakers are experiencing a downward trend in sales volume, and it can be said that Japan as a whole is in the midst of an era in which cars are not selling well. The reason cars are not selling well in Japan is not because the quality of cars has deteriorated. In fact, the quality of cars continues to improve, and Japanese cars are highly regarded overseas for their high quality. Let us explore the reasons why cars are not selling as well as they used to.

The absolute number of population is decreasing.

The first thing to know is that the absolute number of the Japanese population is decreasing. Since the absolute number of people who can become customers is decreasing, this naturally has a bearing on car sales. Another reason is that the adult population continues to decline in line with the population decrease. A car license can only be obtained after the age of 18, and a decrease in the adult population can be directly attributed to a decrease in the number of car buyers. The adult population peaked in 1994, and is expected to decline further in the current era of declining birthrates.

Fewer people have the money to buy cars.

Another reason why cars are not selling well is that fewer people have the money to buy cars. If you don’t have the money to buy a car, of course you can’t buy one. A car is convenient to have, but it is not absolutely necessary, so only those who can afford to buy a car will purchase one. Real income and disposable income have been declining year after year, and income and consumption peaked in 1995 and have been declining ever since. As a result of the inability to afford a car, fewer people are buying cars.

Deteriorating employment conditions are the reason behind the decline in income. 

The recession has led to an overall downward trend in income, and the ratio of non-regular workers has increased, especially among the younger generation, resulting in a decrease in the absolute amount of income. At the same time, security of livelihood is becoming less secure, and conditions for borrowing are becoming tougher. It takes a certain amount of money to buy a car, and many people take out a loan to purchase one. If borrowing is difficult in addition to a decrease in income, it is natural that the number of buyers will decrease.

Population is concentrated in the cities.

One possible reason why people do not need to buy a car is that more and more people do not need to use a car in their daily lives. This is due to the fact that the population is concentrated in urban areas, with the Tokyo metropolitan area currently home to 30% of Japan’s total population. In addition, while the population continues to flow into the Tokyo metropolitan area, the population of the Kanto region is not growing, so the population seems to be concentrated in Tokyo. In the Tokyo metropolitan area, transportation is excellent and there is little need for a car. The concentration of population in the Tokyo metropolitan area has reduced the need for cars, which in turn has reduced purchasing power.

Lack of interest in consumerism

Another reason for the lack of car sales is that people in their 20s-35s do not want to buy things in the first place, and their consumption habits have been declining since the 1990s. This is due in large part to the spread of social networking services, which has led to an increase in the number of people spending money on food, fun, travel, and other activities for posting on social networking sites. Because they are not interested in consumerism, more and more people are not spending money on cars as well as on other consumption.