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Japan automakers reach for 40% American market share

SUVs seen pulling up Japanese auto sales in U.S.

TOKYO -- Japanese automakers are looking to lift their share of the U.S. market to the highest level in eight years this fiscal year, betting on the growing popularity of sport utility vehicles to take them there despite signs of an overall market slowdown.

In fiscal 2017, which ends March 2018, six major Japanese automakers -- Toyota Motor, Nissan MotorHonda Motor, Subaru, Mazda Motor and Mitsubishi Motors -- are aiming to sell a record 6.8 million vehicles combined, according to a Nikkei Inc. compilation of their business plans. The tally marks a roughly 3% rise on the year, enabling their aggregate market share to reach 40% for the first time -- aside from a one-off rise to that level in fiscal 2009, when American automakers suffered significant sales declines following the Lehman Brothers bankruptcy.

Total sales of new vehicles in the U.S. reached a record 17.8 million units in 2016. But this year, the figures may well fall short of 17 million, as sales have declined for five straight months.

Driven by demand

Nissan, Honda, Subaru and Mazda foresee their U.S. sales climbing to highest-ever levels on strong demand for sport utility vehicles. In a period of cheap gasoline, SUVs and pickup trucks are increasingly popular in the U.S.

Nissan, which is targeting a 1% increase to 1.6 million units, has started exporting the Rogue SUV from Japan because production in the U.S. is not enough to keep up with demand.

Mazda released a revamped CX-5 SUV in the U.S. this spring. The company has set its sights on raising sales there by around 9% in the current fiscal year. It will export the mainstay SUV from Japan.

Mitsubishi Motors, which has ended U.S. production, will increase exports to the U.S. and roll out a new SUV as soon as the autumn.

Honda is gearing up for a release of all-new Accord sedan in the fall, and seeks a 3% sales increase to around 1.7 million.

Subaru is working on expanding production capacity in the U.S. state of Indiana, and will release a compact SUV this summer. The company targets a 10% or so increase in sales.

In 2016, Japanese vehicle exports to the U.S. increased around 8% to about 1.7 million units, according to the Japan Automobile Manufacturers Association. The momentum is likely to continue.

Toyota projects a 10% increase in exports to North America to 780,000 units in fiscal 2017. In the U.S., SUVs under the luxury brand Lexus are selling well, and recently released compact SUVs are buoying overall sales. However, the leading Japanese automaker sees its 2017 sales there remaining mostly unchanged from the prior year at 2.45 million units.

Still No. 1

The U.S. will continue to account for a little less than a fifth of the global market, the British research company IHS Automotive projects.

For many automakers, the U.S. remains the most important market, offering strong demand for high-margin products. But it is increasingly difficult to secure profits because of the hefty incentives producers must offer amid heated competition. The struggles of American automakers are becoming noticeable as well, as in General Motors' downsizing moves. Increased auto imports from Japan could evoke a reaction from the U.S. government.

The U.S. accounts for roughly 30% of global sales by the six major Japanese carmakers. The Japanese share is 15% in China, now the world's largest auto market. The figure is just over 10% for Europe.

In Southeast Asia, Japanese automakers have an overwhelming market share, but the regional market is less than a fifth of the U.S. market in size. Overall, Japanese automakers' dependence on the American market is deepening.


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