Japanese Auto Companies Might Decline.

Economic data indicate that Japanese care manufacturing companies are also experiencing slumps in automotive sales. Toyota s Japanese s domestic sales fell 1.3%, Nissans domestic sales dropped 11% and Honda s domestic sales dropped 2% in 2006. Each of the major auto manufacturers experienced some drop in domestic sales which means that demand in their home countries is decreasing.
Despite a reduction in the demand and sales the Japanese automakers domestic output rose 11% creating an oversupply. Furthermore overseas production of these Japanese auto manufacturers rose 9.2% while world demand is expected to increase 16% until 2010. This would indicate that the Japanese auto companies should produce as much as they want and still have a market for them.
A study by Daimler Chrysler indicates that there isn t likely to be such high growth in demand of vehicles in the future. They expect emerging markets to need more cars but developed countries like the U.S. and Europe should decrease in demand. If Japan is flooding markets with their vehicles it is highly possible the price will start to drop and the growth of the Japanese companies will be retarded.
One must also consider the oil prices that currently are low but have the potential to rise once surpluses are removed. The higher the oil prices the less likely people will want vehicles. Furthermore, consumers are looking for highly fuel efficient cars which are not widely available on the market. Japan, who has been donned the new chief of building cars over the past decade, may begin to lose their competitive edge.
Murad Ali is a three time published book author, a human resource manager, and a Ph.D. candidate. For more articles visit the following: http://www.thenewbusinessworld.blogspot.com http://www.onlinebusinessconcepts.blogspot.com



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