TOKYO, Feb 2 – New vehicle sales in Japan fell to the lowest level in four decades in January as the deepening recession depressed consumer sentiment, an industry group said Monday.
Only 174,281 new vehicles were sold, the lowest level since February 1968, according to the Japan Automobile Dealers Association.
The sales, which exclude mini-vehicles, fell 27.9 percent from a year earlier — the steepest drop since a 45.1 percent plunge in May 1974 in the wake of the first oil crisis.
It was the sixth straight month of falling sales.
"Consumer sentiment has worsened drastically," a spokesman for the association said.
With companies laying off workers in response to ballooning losses, potential car buyers appear to be worried about losing their jobs, he said.
The gloomy January follows Japanese automakers\’ worst year in three decades in 2008, when new vehicle sales tumbled 6.5 percent to 3.2 million units.
The Japanese auto market has been shrinking in recent years as many young people shun cars, particularly in cities, due to sluggish wages, high fuel costs and the wide availability of public transport.
The global economic downturn has also dealt a serious blow to automakers, which rely heavily on exports for their earnings. Japanese automakers are now slashing thousands of jobs and reducing production to weather the crisis.