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Japan auto sales slump, worst December on record

Automobile sales in Japan, excluding 660cc minivehicles, plunged 22% in December from a year earlier to the worst level on record for the month, capping a dismal 2008 when demand fell to a 34-year low.

December sales of new cars, trucks and buses totaled 183,549 vehicles, the Japan Automobile Dealers Association (JADA) said on Monday, with all brands recording a drop.

Combined with sales of minivehicles, which fell 6.7% to 122,770 units, Japanese auto sales slid 17% to 306,319 vehicles.

“We never imagined sales would fall this badly,” JADA Director Takeshi Fushimi told reporters. “This is a bleak situation.”

Fewer Japanese are buying cars every year as more people populate urban areas where trains and buses are the preferred mode of transportation. A shrinking population and diminishing interest in cars among young people are also driving down demand.

The weak economy is not helping, but Fushimi said a lack of financing was not behind the fall in Japan, unlike in many other markets, where sales have been hit by tight credit.

For all of 2008, sales of non-mini vehicles totaled 3.21 million units, down 6.5% from last year, marking the fifth straight year of decline.

Last month, the Japan Automobile Manufacturers Association (JAMA) projected a fall in demand for new automobiles in 2009 to 4.86 million vehicles - the first drop below 5 million in 31 years.

But even that projection had not taken into account the extent of the slide in December, JADA's Fushimi said.

Overall vehicle demand totaled 5.08 million units in 2008, down 5.1%.

Sales of non-mini vehicles at top-ranked Toyota Motor Corp, including the Lexus brand, fell 17.8% in December, while Nissan Motor Co fell 21.8% and Honda Motor Co retreated 25.3%.

Toyota-branded car sales fell for the fifth straight month in December, while Lexus has been down for 16 months in a row. (Reuters)