Slowing growth in key emerging markets will continue into the new year, the group that represents Japan’s automakers believes.
Last year, decelerating demand in Brazil, India, Russia and Thailand ate into the increased profits Japanese brands realized from their weakening home currency, a trend that is expected to persist in 2014.
“A deceleration is seen in emerging markets that have been growing rapidly until now,” Akio Toyota, president of Toyota and chairman of the Japan Automobile Manufacturers Association, said in a statement. “This year, the situation is unpredictable.”
The slowdown is a concern for all automakers, but for Japanese companies, it’s exacerbated by fears of a renewed anti-Japan sentiment in China should a territorial dispute over East China Sea islands escalate in the future. Disagreement concerning the islands’ ownership sparked a widespread Chinese backlash against Japan-made products in late 2012, with sales of nearly all Japanese vehicles taking a significant hit.
“It may be impossible” to shield against tensions between the two countries, Toyoda told Automotive News on Dec. 20. “But we will work to minimize the impact.”
Toyoda also voiced concern over Japan’s auto market, which could suffer from an upcoming increase in the country’s sales tax. Currently set at 5 percent, the tax will climb to 8 percent on April 1, with a further boost to 10 percent possible in 2015.
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