Hirofumi Shiraki, a 60-year-old owner of a machinery company in western Japan’s Mie prefecture, may be representative of the sort of buyer that’s been driving premium car sales. While eyeing an i8 plug-in sports car at BMW’s new showroom in Tokyo’s Odaiba district, Shiraki said he’s budgeting about 10 million yen for a new car to add to his Audi and Lexus.
“Design matters most to me,” said Shiraki, who added that his business was doing well. “I may just drive off the dealer today if I found the model I like.”
By contrast, deliveries of kei cars, with engines no bigger than 0.66 liters, may drop by about 8 percent this year, according to a forecast by the Japan Automobile Manufacturers Association. The optimism behind the group’s initial projection for an 8.7 percent gain soon evaporated after Prime Minister Shinzo Abe postponed an increase in the sales tax to 2019, which was expected to have encouraged consumers to buy new vehicles.
“Consumption by the mass market remains weak, while rich people on top of the pyramid continue to be rich,” said Zhou Jincheng, a Nagoya-based analyst at automotive market researcher Fourin Inc. “When you buy a car at 1 million yen, price is a key factor and every yen counts. When you are rich enough to buy a 10 million-yen car, price probably isn’t the first thing you consider.”
This article was provided by Bloomberg News.