In conjunction with falling consumer demand for auto and electronics, Japan’s Exports Plunge 46% in a Year.
Japan’s exports plunged 45.7 percent in January from a year earlier, resulting in a record trade deficit, as recessions in the United States and Europe smothered demand for the country’s cars and electronics.
The shortfall widened to 952.6 billion yen ($9.9 billion), the Finance Ministry said on Wednesday in Tokyo. It was the biggest deficit since 1980, the earliest year for which there is comparable data. The drop in shipments abroad eclipsed a record 35 percent decline set in December.
Exports to the United States tumbled 52.9 percent from a year earlier, and shipments to Europe also posted big declines. The collapse is likely to force Japanese companies to keep firing workers and closing factories, worsening an economy that shrank the most in 34 years last quarter.
German Contraction Driven by Export Slump
Bloomberg is reporting German Economic Contraction Driven by Export Slump.
German exports slumped in the fourth quarter, causing Europe’s largest economy to contract the most in 22 years.
Exports dropped 7.3 percent from the previous quarter and company investment in plant and machinery declined 4.9 percent, the Federal Statistics Office in Wiesbaden said today. Companies are scaling back production and cutting jobs as global growth grinds to a halt and demand for exports wanes. The German government expects the economy to contract 2.25 percent this year, its worst performance since World War II.
Volkswagen AG, Europe’s biggest carmaker, said sales dropped 21 percent in January from a year earlier, while deliveries at Bayerische Motoren Werke AG, the world leader in luxury autos, fell 24 percent. MAN AG, Europe’s third-largest truckmaker, said it will cut costs further and extend reductions in employees’ working hours after declining sales caused fourth-quarter profit to plunge by almost half.
European Truck Sales Plunge 35%
The European Automobile Manufacturers Association is reporting European Truck Sales Plunged 35% in January as Slump Deepened.
European heavy-truck sales plunged 35 percent last month, more than double the drop in December, as the global recession ravaged the region’s main markets.
Manufacturers sold 20,068 trucks weighing 16 metric tons or more in January, compared with 30,755 a year earlier, the Brussels-based European Automobile Manufacturers Association said in a statement today.
Spain and the U.K. led the slump among larger western European markets, with declines of 76 percent and 40 percent respectively. The U.K. turned negative from a 13 percent increase in December. Germany, where business confidence hit a 26-year low this month, suffered a 28 percent January drop.
Truck sales have waned as the global financial crisis erodes demand for the transportation of goods, causing Daimler AG, Volvo AB and MAN AG, Europe’s top three manufacturers, to cut thousands of jobs. Sales plunged 58 percent in the 10 eastern countries that joined the European Union in 2004, with Poland, the biggest, suffering a 76 percent decline.
Purchases of vans weighing less than 3.5 tons tumbled 37 percent in January to 114,664, while demand for vehicles exceeding 3.5 tons, including heavy trucks, fell 33 percent to 27,336, according to the ACEA. Registrations of new buses and coaches declined 16 percent.
Toyota Cuts January Vehicle Production by Most Since 1987
When demand drops, output follows. Toyota Cuts January Vehicle Production by Most Since 1987
Toyota Motor Corp., Japan’s biggest automaker, slashed global production last month by the most in more than two decades as the recession and a credit crunch decimate demand for new automobiles.
Toyota’s output fell 43 percent to 413,285 vehicles in January. Honda Motor Co.’s production dropped 33 percent to 226,551 vehicles and Nissan Motor Co.’s slid 54 percent to 145,286 units, the companies said separately today.
Japanese carmakers are cutting output and earnings forecasts as slowing economies and rising unemployment in their largest markets deter consumers from buying new vehicles. Toyota’s domestic output is being reduced by half this quarter, compared with a year earlier, as exports plunge and it heads for its first operating loss in 71 years.
“Things will get worse before they get better.” said Ed Rogers, chief executive officer of Tokyo-based hedge fund adviser Rogers Investment Advisors Y.K. “Nobody is buying cars — there is a global freeze of commerce.”
Honda’s global production decline in January was its biggest since at least 1999, as exports to the U.S. fell 62 percent in the period, the company said.
Nissan, which posted its biggest production decline since at least 1984 last month, estimates domestic output will tumble 16 percent to 1.06 million vehicles this fiscal year. Nissan last month said its U.S. plants will build vehicles only four days a week indefinitely.
The automaker’s total exports fell 62 percent last month, the most in at least 38 years. Exports to North America slid 85 percent.
Mazda Motor Corp., Japan’s second-largest car exporter, said global production fell 63 percent to 45,548 units in January.
Fuji Heavy Industries Ltd., the maker of Subaru-brand cars, said global production fell 32 percent to 31,654 vehicles in January. Suzuki Motor Corp., Japan’s second-largest minicar maker, said global production fell 20 percent to 177,085 units.
Without jobs there is little reason to believe this economy is close to turning around. Yet, stimulus plan or not, there is simply no reason for jobs to pick up any time soon. I expect another half million jobs will be lost in each of the next couple months.
The key is consumer attitudes towards debt and spending have changed, and those attitudes are not changing back. Expect a long, deep recession no matter what Obama and Bernanke do.
Mike “Mish” Shedlock
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