Country Production Analysis: Japan

In 2014, Japanese output will increase 2.0% year on year (y/y) to 9.23 million units, thanks to the strong first-quarter output before the consumption-tax increase and the stable second-quarter output amid backlogs for some of the latest models. Output is expected to decrease toward 2017 owing to the gradual decrease of domestic sales and declining exports owing to the co-location strategies applied to some models. Output is expected to fall to 8.24 million units in 2017, but OEMs have a chance to pull the overseas production partially back to Japan in the future in order to maintain domestic production, thanks to the depreciating Japanese yen.