Toyota orders in July: the end of the subsidy effect

by SR on August 10, 2012

Toyota orders in Japan in units and year-on-year %

  • Conclusion: winding down for the summer. One of the regional Aichi newspapers reported today that Toyota’s orders for July 2012 came to 124,000 units, an increase of 4% year-on-year. (In Japan you don’t usually buy the car and drive it off the lot; instead you put in an order that takes 2-4 weeks to be delivered.) While the absolute level of orders has held up and is still at or above the levels of April and May 2012, the rate of growth compared to the previous year has slowed. No doubt orders will slow further as Japan’s “eco-car” subsidies run out. Production, which is what drives the revenues of auto parts suppliers like Denso, will decline accordingly, but in any case the Obon holidays of August begin next week and Toyota group companies usually observe this with a full week of holidays.
  • No rest for some. As I have noted previously, the Toyota group companies do not observe isolated national holidays and work through on these days. Instead they take solid chunks of holidays at Obon, at the New Year and during Golden Week in early May. Not only does this give their employees a rest but it gives the maintenance teams (yes, they do come in to work) a chance to take a thorough check of the facilities. Also, special teams will come in to make non-trivial reconfiguration of lines for either greater efficiency or new product launches. The consensus is that production will fall after the usual post-Obon surge in production in September, plateauing at a lower level in the final quarter of 2012. Nothing unexpected there.

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