RETAIL | Staff Reporter, Singapore

Japan car sales set to continue decline in 2017

It could fall by 5.2% to 3.8m units.

Japan's weak economic growth outlook will translate into another year of decline in the passenger car segment in 2017 as consumer confidence levels remain weak, translating into less willingness to spend on big-ticket items, said BMI Research.

"In 2017, we expect a sluggish outlook for the Japanese consumer on the back of weak economic activity to translate into another year of decline in the passenger car segment," it said.

The research house forecast a 5.2% contraction in passenger car sales in 2017, reaching 3.8m units.

Here's more from BMI:

We expect consumer confidence levels to remain weak in 2017 as economic growth remains muted, which will weigh on growth in the passenger car segment as consumers shy away from spending on big ticket items.

Despite low unemployment, ultra-loose monetary policy and other government stimulus measures, our Country Risk team expects economic activity to remain muted in 2017, with forecast real GDP growth of just 0.5%.

We believe this will not bode well for a struggling autos market as it will continue to act as a drag on consumer confidence levels.

As evidence of this, willingness to purchase durable goods and overall consumer confidence in Japan was recorded at 41.9 and 42.3 respectively in October 2016, below the 50 point threshold. This indicates that respondents are pessimistic about the country's economic condition 

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