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Japan’s Sept. car exports down 40% amid parts supply crunch

  • October 20, 2021
  • , Kyodo News , 12:39 p.m.
  • English Press

Japan’s car exports in September fell 40.3 percent from a year earlier, as supply chain disruptions in Southeast Asia due to the coronavirus pandemic and a global semiconductor crunch forced domestic automakers to cut output, government data showed Wednesday.


Auto shipments marked the first year-on-year drop in seven months and the sharpest decrease since a 49.9 percent dive logged in June last year amid the initial shock of the pandemic, according to a preliminary report by the Finance Ministry, in a development that could put a damper on the nation’s economic recovery.


The slump in car exports slowed growth in Japan’s overall goods exports in the reporting month to a 13.0 percent rise from a year earlier to 6.84 trillion yen ($60 billion), compared with a 26.2 percent gain in August and a 37.0 percent jump in July.


Goods exports nevertheless saw a double-digit percentage increase for the seventh straight month, according to the ministry.


Imports expanded 38.6 percent to 7.46 trillion yen, up for the eighth month in a row, mainly pushed up by surging prices for crude oil purchased from producers such as the United Arab Emirates.


As a result, Japan’s trade balance registered a deficit of 622.76 billion yen, turning negative from a 667.36 billion yen surplus a year ago to post red ink for the second consecutive month.


A ministry official told reporters that Japanese automakers have been cutting production in response to parts shortages caused by factory shutdowns in Southeast Asian nations as coronavirus cases surged there as well as the prolonged worldwide chip crunch.


Earlier this month, Toyota Motor Corp. said it estimates its global output for November will fall by up to 150,000 units from its initial plan to produce about 1 million vehicles, while Honda Motor Co. has said it expects its October domestic production to drop by 30 percent from the previous plan.


Also citing the recent congestion of cargo ships at ports in California and elsewhere as a potential factor, the official said, “The supply side challenges, in a broad sense, might have affected car exports.”


Takeshi Minami, chief economist at the Norinchukin Research Institute, predicted that Japan’s auto exports could remain sluggish “at least until the year’s end” with semiconductors in short supply “for the time being.”


However, Minami added, “The virus spread in Southeast Asia, driven by the (highly contagious Delta) variant, is calming down, so the auto parts procurement problem is expected to dissolve gradually” except for chips.


By country, exports to China, Japan’s largest trading partner, rose 10.3 percent to 1.48 trillion yen for the 15th consecutive month of growth on brisk shipments of semiconductors and plastics. Imports from the neighboring country gained 23.8 percent to 1.77 trillion yen.


In trade with the United States, Japanese exports marked the first decline in seven months, down 3.3 percent to 1.16 trillion yen, while imports grew 36.3 percent to 762.53 billion yen.


Across Asia including China, exports rose 21.3 percent to 4.09 trillion yen. Imports from the region grew 25.7 percent to 3.51 trillion yen.


Shipments to the European Union increased 12.1 percent to 621.26 billion yen, with imports from the bloc expanding 25.0 percent to 839.50 billion yen, led by pharmaceutical products including COVID-19 vaccines.


For the first half of fiscal 2021 from April, Japan’s goods trade posted a deficit of 389.79 billion yen, the first red ink since the first half of fiscal 2020.


Exports rose 34.2 percent from a year earlier to 41.46 trillion yen, logging the fastest growth since the ministry began compiling data in January 1979, and imports were up 30.3 percent to 41.85 trillion yen. Both of them rose sharply, mainly in reaction to the previous year’s 19.2 percent and 17.9 percent falls, respectively.


All figures were compiled on a customs-cleared basis.

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