Japan's sales of new cars, trucks and buses fell an unexpectedly sharp 12.7 percent in April from a year earlier as a sales tax increase took effect, the Japan Automobile Dealers' Association said Thursday.
"The main reason for the decline was the increase in the consumption tax," said spokesman Toshi-yuki Yagi-hashi. "I think this condition will probably continue for the next two to three months."Sales came to 326,975 vehicles in April, the group said. The sales tax was raised to 5 percent from 3 percent on April 1.
Passenger car sales declined 11.5 percent to 225,463, truck sales dropped 15 percent to 100,257, and bus sales were 21 percent lower at 1,255.
The association forecasts that overall sales will decline 7.9 percent to 5.22 million vehicles in the current fiscal year ending March 31, 1998, partly because of the higher consumption tax.
"We had expected some decline, but we thought April sales would be supported from rush demand ahead of the consumption tax increase," which spilled over into April, said Kaoru Kurata, an auto industry analyst at Goldman Sachs (Japan) Corp.