Japan Car Production May Recover 1.7-1.8 Million for Apr-Jun

Japanese domestic car production is expected to recover by 100,000-200,000 cars to 1.7-1.8 million cars for April-June from January-March, though which would still be lower by 40% from the corresponding period of 2008, according to Japanese integrated steel maker source. Toyota Motor Corporation is likely to increase car production by about 25% in May compared with April after inventory adjustment would advance to some level. Other automakers also seem to rebound their car output in May or June, mainly for small cars whose sales are relatively steady than large cars.

Automakers entered wide-range output reduction in November 2008 following worldwide sales drop. Japanese domestic car production is estimated at around 1.6 million cars for January-March, a half of the corresponding period of 2008. Along automakers’ low production, steel makers’ operating rate has become below 50% at mills to produce auto related products. Operating rate has also halved at related coil centers compared with April-September 2008.

Japanese domestic sales of new cars were 174,281 cars in January, which represented year-on-year decline for 6 months in a row. However, automakers are likely to recover car production gradually to the level as much as actual demand, when inventory adjustment is advancing for cars and auto components.

A source of Japanese integrated steel maker said actual output demand is expected at around 2 million cars per quarter including export even at the current market level. The source expected domestic car production could reach 2 million cars for July-September.