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Italy’s store closures, U.S.’s lower auto demand may affect Japanese firms

  • March 13, 2020
  • , Asahi , p. 6
  • JMH Translation

The World Health Organization’s designation of the new type of coronavirus as a “pandemic” and U.S. President Donald Trump’s announcement of a travel ban on 26 European countries may affect Japanese automakers and other Japanese firms.

 

The Italian government has ordered shops to close, with some exceptions, which is likely to affect auto sales. “We have no other choice but to follow the (Italian) government’s policy,” says a Japanese automaker representative.

 

On March 11, a major U.S. brokerage released projections that domestic auto demand in the U.S. will fall and this year’s new car sales will drop by 9% from a year earlier to the level of 15.5 million vehicles. With the recent entry restrictions, the U.S. economy could worsen further and demand could lower. If the world’s second largest auto market suddenly shrinks, it will inevitably deal a blow to Japanese automakers.

 

But a good number of Japanese companies believe the U.S.’s entry restrictions will have limited impact. Panasonic, which has offices in Europe and the U.S., says it is asking employees to defer nonessential business travel and it thinks that the entry restrictions will not have a particular impact on its business performance. Similarly, Hitachi says its employees make few regular visits to its European and U.S. offices. “[The entry restrictions] will not have a specific impact on us,” a spokesperson of the company said.

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