Japan Auto Sales Plunge as Young Lose Interest

By Yuri Kageyama

TOKYO -- To get around the city, Yutaka Makino hops on his skateboard or rides commuter trains. Does he dream of the day when he has his own car? Not a chance.

Like many Japanese of his generation, the 28-year-old musician and part-time maintenance worker says owning a car is more trouble than it's worth, especially in a congested city where monthly parking runs as much as 30,000 yen ($330), and gas costs $3.50 a gallon (about 100 yen a liter).

That kind of thinking -- which automakers here have dubbed "kuruma banare," or "demotorization" -- is a U-turn from earlier generations of Japanese who viewed car ownership as a status symbol. The trend is worrying Japan's auto executives, who fear the nation's love affair with the auto may be coming to an end.

"Young people's interest is shifting from cars to communication tools like personal computers, mobile phones and services," said Yoichiro Ichimaru, who oversees domestic sales at Toyota.

The Japan Automobile Manufacturers Association predicts auto sales in Japan will fall to 4.86 million in 2009 -- the first time below 5 million in more than three decades. This year, sales are projected at 5.11 million, the worst since 1980.

Vehicle sales peaked at 7.78 million vehicles in 1990 during the nation's heyday "bubble" economy. After that burst, Japan was mired in a decade-long slowdown, which squelched consumer spending and sent car sales on a decline. A surge in gas prices, which has subsided in recent weeks, also eroded sales.