Industry Trend Analysis - Improving Consumer Spending To Lead To Sales Expansion - OCT 2017
BMI View : A promising outlook for the Japanese economy, helped by improving levels of growth in consumer spending, has lead us to revise up our forecast for passenger car sales to growth of 3.0% in 2017, up from a previously forecasted contraction of 2.3%.
The strong performance of the Japanese economy has led us to turn bullish on our previously downbeat outlook for the passenger car market. Having previously expected a 2.3% contraction in passenger car sales in Japan in 2017 due to the delay in the implementation of the sales tax ( see 'Sales Tax Delay Will Postpone Car Sales Recovery', June 3), we now forecast sales to rise by 3.0% this year, helped by stronger consumer spending.
Japan's real GDP growth accelerated to an annualised rate of 4.0% q-o-q and 2.1% y-o-y in Q217 from a revised 1.5% q-o-q and 1.4% y-o-y in Q117, driven by consumer spending and investment. This expansion marked the sixth consecutive quarter of growth, the longest since 2016. As a result of this strong economic performance, our Country Risk team has revised up their forecast for Japan's 2017 real GDP growth to 1.8% from 1.3% previously, which would mark the fastest pace of growth since 2013 and they believe this growth boom could continue into H217 and into 2018 ( see 'Growth Boom Is Not A Sign Of Things To Come', August 14).
|Pickup In Household Spending To Support Car Sales|
|Japan - Passenger Car Sales, Units|
|f = BMI forecast. Source: JAMA, BMI|