In 2024, Japanese automobile market faced significant declines in production, domestic sales and export. Japan’s auto production from January to September 2024 was only 6.01 million, down by 8.8% compared to the same period last year, according to Japan Automobile Manufacturers Association (JAMA). The performance in domestic sales and exports was also unsatisfactory. Japanese domestic sales of automobiles in the first nine months were 3.57 million, a 6.3% decrease year-on-year, while exports stood at 3.06 million, marking a 4.0% decline.

Behind these declines are several causes:

Export

Japan’s key export destinations include the U.S. (24%), the EU (10%) and Asia (7%). The performance in exports to the U.S. was notably weak. Toyota Motor North America’s September sales dropped 21% year-on-year on a volume basis, marking the fourth consecutive month of declining sales. This trend is primarily attributed to the U.S. reshoring movement and accelerated push for electric vehicles. Japanese automakers, led by Toyota, have taken a cautious approach towards electrification. Recent adjustments to EV subsidies in the U.S., which benefit American car manufacturers, have posed serious challenges to Japanese exporters.

Besides, Japanese car exports to China have also underperformed. With the rapid growth of China’s NEV market and ongoing price wars, Japanese automakers have faced significant challenges in their operations in China. Currently, the market share of Japanese cars in China has declined from a peak of 25% to 15%.

Domestic Sales

The Japanese automobile market is saturated. As consumers show lower willingness to buy cars, manufacturers cut production accordingly. The shrinking domestic demand further exacerbates the challenges faced by the Japanese auto industry.

Other Factors

Testing scandals have also inflicted a significant blow to the Japanese auto industry. Scandals involving several Japanese carmakers such as Toyota, Honda, Mazda led to the halt of production and sales of related models, not only directly impacting production but also severely damaging the reputation of Japan’s auto industry. Reduced consumer trust in Japanese automakers has affected sales and exports.

Impact on Polyether Polyol Consumption

The declines in Japanese automobile market negatively impacted the consumption of polyether polyols. Japan’s consumption of polyether polyols in the auto sector in 2024 decreased xx% year-on-year to xx tonnes, according to Pudaily.

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