Toyota orders: still building in June 2012

by SR on July 20, 2012

Toyota domestic auto orders (thousand units)

Japan autos building towards climax

Domestic orders for autos at Toyota have been ticking up gently over the past few months. We mentioned the orders in this post last month, noting that they are not an “official” release and thus we don’t have a time series. Because of that I can’t tell whether June 2012 orders are stronger than usual for the season or not. However, when one considers the clearly positive and unseasonal effect that so-called ‘eco-car’ subsidies are having on sales in Japan, orders are probably reflecting that and are likely a bit better than normal. In the chart below you can see the red line (2012) in May and June soaring above even the high levels of 2008.

Japan total auto sales by month (thousand units)

Nearly all of these sales will be “pulled forward demand” rather than “new demand” so we are likely to see a sharp reduction in sales when the subsidies run out either this month (July 2012) or August. In that sense, subsidies are not very useful, although in this post we offer a couple of arguments in favour of subsidies, plus charts showing the impact of subsidies in eight major markets, from Brazil to the United States.

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