While the market for automobiles in China has received an enormous amount of attention, the market for new vehicles in another Asian giant, Japan, also faces stress.
The decision by the government of Japanese Prime Minister Shinzo Abe to delay a two percentage point increase in the country’s sales tax by two and a half years from April 2017 to 2019 is expected to have an adverse impact on Japan’s carmakers, according to new estimates by BMI Research, a division of Fitch Investor Services.
Abe delayed the sales tax increase over concerns it could damage domestic demand and derail economic growth, according to BMI. The rise in the sales tax from 8% to 10% was initially meant to take place in October 2015, but was then moved to April 2017 and has now been pushed back even further to October 2019. (more…)