Toyota orders: another small negative month in Japan

by SR on October 24, 2012

Toyota monthly auto orders in Japan

Aqua catches up

An article in the Chubu Keizai business daily reported that Toyota‘s orders in September 2012 came to 112,000 units, falling 2% compared to September 2011, a slowdown being attributed to the cessation of the eco-car subsidies that had been running in Japan. This was, as can be seen from the chart at the top of the page, the second negative year-on-year figure for 2012. On a related theme, the article commented that it looks as if the Aqua small hybrid model will overtake the Prius in sales for the first time since the Aqua was launched.

This is not particularly surprising, as the base price for the Aqua is 1.69 million yen, substantially easier on the pocket than the 2.17 million yen base price of the Prius. However, according to Toyota, the Prius qualified for a typical subsidy of 146,100 yen while the Aqua qualified for only 116,200 yen. Perhaps in some confused fashion Japanese consumers opted for the car with the larger saving, even if that meant a larger overall spend.

Toyota monthly sales of Prius and Aqua models in Japan (units)

Still, as the graphic directly above shows, the gap between the Aqua and the Prius was large only for the first three months after the Aqua’s launch, and narrowed sharply thereafter. It was only a matter of time before the Aqua had a better month than the Prius but it remains to be seen whether the Aqua can sustain this. Either way, robust sales of these two models provides more evidence that the Japanese driver is increasingly turning to hybrid vehicles. In the long term this is a positive for Toyota. The US appetite for hybrids seems to have waned and the Europeans – content with modern clean diesels and wary of costs associated with hybrid cars – never had much appetite for the Prius in the first place. For Toyota, Japan continues to provide a large semi-protected market of consumers who are sympathetic to hybrids, a market into which Toyota can launch and test new hybrid products.

Go Subaru

The graphic below shows the percentage change in the share price since the beginning of 2012. Toyota has partly recovered from the weakness in its share price caused by the anti-Japanese demonstrations in China; the stock has risen 21% year-to-date compared to an increase of just 2.8% for the TOPIX index. While this is one of the best performances in the sector, it pales against the 59.1% increase in the share price of Fuji Heavy, which owns the Subaru brand. I suspect this is being driven by the very positive reviews and strong sales of Toyota’s new ’86’ sports car (called ‘GT86’ in Europe, ‘Scion FR-S’ in North America). Subaru sells its own version, called the ‘BRZ’ and is responsible for production of both models at its Ota city factory in Gumma. The ’86’ is not intended to be a model that ships in huge volumes, but for a small OEM like Fuji Heavy it could have a significant impact on sales and profits.

Share price performance of Toyota and related stocks year-to-date (percent change)

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