Toyota is facing a Japan problem.
The company was outsold by General Motors for the first time in six quarters, as deliveries in Japan extended their decline after government incentives for fuel-efficient models expired last year.
Toyota and its subsidiaries sold 2.48 million vehicles during the quarter ended June, just shy of the 2.49 million that GM disclosed earlier this month. Japan's largest automaker sold 8.4 per cent fewer vehicles in its home market last quarter.
Toyota's decline in Japan car sales shows a rare weak spot for a company that's forecasting its biggest profit in six years and whose stock has gained 54 per cent this year. Japanese vehicle sales have fallen steadily since the asset bubble burst in 1989, with temporary boosts from government subsidies.
"The decline in Japan will continue," said Jun Nokuo, an analyst with researcher RL Polk & Co in Tokyo. "It is an aging society and the population is shrinking. At the same time, the popularity of cars is declining because public transportation is easy to use."
Toyota's sales in the first six months of this year dropped 1.2 per cent to 4.91 million units. GM sold 4.85 million vehicles in the first half and Volkswagen delivered 4.7 million, according to the companies.
Toyota has been projecting since late December that sales will climb to almost 10 million units – a milestone no automaker has ever breached – in 2013.
Japan's largest manufacturer has an ever bigger buffer in the yen, whose decline has been bolstering the value of Japanese exports. Toyota, which reports earnings on August 2, probably saw profit last quarter surge 48 per cent to the highest in more than five years, according to the average analyst estimate compiled by Bloomberg.
The yen has weakened more than 12 per cent against the dollar this year and this week traded at ¥100 versus the greenback. The Japanese currency may weaken to ¥105 in the fourth quarter, according to the median of estimates compiled by Bloomberg.
* Bloomberg News
