Japan Auto Sales Take February Nosedive

Japanese auto sales plunged 32.4 percent in February, the biggest monthly drop since 1974 on sinking demand as the global economic downturn deepens, an industry group said Monday.

Japanese consumers bought 218,212 vehicles for the month, the Japan Automobile Dealers Association said in a statement. That's the seventh consecutive month of year-on-year declines.

"Consumers continue to shy away from buying cars in the face of an economic slump. Auto demand remains depressed, and it is very difficult to predict an upturn in the market right now," said Kentaro Nakata, a spokesman for the industry group.

The dismal domestic sales figure, which follows a 27.9 percent drop in January, is the latest bad news for Toyota, Honda, Nissan and Japan's other automakers, which have been battered by slumping sales around the world, particularly in the vital U.S. car market.

Japan's auto market has contracted steadily since peaking in 1990 partly because young people generally have less enthusiasm for owning a car. Parking and gasoline can be expensive and many opt to use Japan's efficient train system. Cars also seem to be less of a status symbol than they were for their parents.

In 2008, Japanese auto sales fell to their lowest in 34 years at 3.21 million vehicles, down about 6 percent from a year earlier, according to the association. In 1990, annual sales peaked at more than double that figure, reaching 7.78 million vehicles.

That decline in their home market is creating headaches for Japan's automakers, which have launched various marketing campaigns to appeal to younger buyers. Toyota, for example, has hosted test-drive events, taken part in fashion shows and even developed its own suburban shopping mall that houses a dealership.

Hit by plunging sales around the world, Toyota Motor Corp., Japan's biggest automaker, and Nissan Motor Co., the country's third-biggest, are both forecasting annual net losses for the fiscal year through March.

Nissan has said it is slashing 20,000 jobs globally by next March, while Toyota and Honda Motor Co. have also announced job cuts. All three are lowering production in response to the drop-off in global sales.