Shrinking Car Market in Japan Countered By Rise of Electric Bikes

Between December and February, the total number of buses, cars and motorbikes on the country’s roads fell 0.2%, while electric bicycle sales climbed 40%.

Published: 19-May-2008

Given that Japan’s car market has been shrinking for years, reaching a 25-year low in 2007 million, execs at Japan’s car makers must be reasonably pleased that sales in 2008 have risen in three out of the first four months of the year. In April, for instance, sales excluding Japan’s 660cc mini-cars, rose 6.9% to 232,993 vehicles.

Still, a report in today’s Nikkei, a business paper, suggests even the mildest celebrations would be premature. For the first time since data was collected in 1963, the total number of vehicles on Japan’s roads has fallen over a three-month period. Between December and February, the total number of buses, cars and motorbikes on the country’s roads fell 0.2% to 79.43 million. The Nikkei reports that comparable data has been available only since 1963, but this is likely the first three-month drop since World War II in any developed car market. That’s bad news not just for carmakers, but also insurers, gas stations, and car repair shops. It also puts the government in a bind. Its plans to spend $567 billion on road building are based on the assumption that traffic volume will peak in 2010, the paper reports.

What gives? One explanation is almost certainly Japan’s falling population. Another is the simple fact that young people, less well off than their parents’ generation, have less cash to spend on cars. In central Tokyo, a parking space—a necessity given you’re not allowed to park on the road—costs upwards of $400 a month (I’m thinking of renting mine out!). It could even be that more Japanese are switching to the next best thing: electric-motor-assisted bicycles. While auto sales have plunged, the Japan Bicycle Promotion Institute reckons 282,600 electro-bicycles, which aren’t included in the numbers, were sold last year. That’s up 40% from five years ago. Cash-conscious mothers, regularly seen around town with at least one child in tow, are the biggest customers.


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