TOKYO, Jan. 1 -- (Kyodo) _ Japan's auto market is expected to face a slowdown in 2014 due to the planned sales tax hike in April from the current 5 percent to 8 percent, Japan Automobile Manufacturers Association Chairman Akio Toyoda said.
"To a certain extent, we will not be able to avoid a slump," Toyoda, also the president of Toyota Motor Corp., said in a recent interview.
Sales of new vehicles in Japan including minivehicles are expected to have stayed above the 5-million-unit level in 2013 after recovering the threshold in 2012.
However, sales are likely to decrease after April since the overall burden for purchasing cars will increase due to the hike in the sales tax rate, despite reductions in the automobile acquisition tax.
"We will continue to lobby for the total abolition of the acquisition tax" when the sales tax is expected to be raised to 10 percent in October 2015, Toyoda said separately in a New Year's message.
Toyoda expressed regret over the government's decision to raise the tax for the ownership of minivehicles with engine displacements of up to 660 cc.
The ownership tax will be raised from 7,200 yen a year to 10,800 yen, with the new tax applying to new cars purchased after April 2015.
Minivehicle sales account for nearly 40 percent of overall new vehicles sales in Japan.
In 2013, four out of Japan's eight major automakers posted record profits in the April to September period, benefitting from the yen's fall versus the U.S. dollar and from Japan's economic recovery.
"We are deeply appreciative of the steps taken" by Prime Minister Shinzo Abe in addressing the yen's excessive strength, Toyoda said in the statement.
As for the global market, Toyoda said, "positive trends were present in the global automobile market in 2013, including continued robustness for the U.S. market," noting the country will remain "undoubtedly important" for the industry.
Meanwhile, he said the prospect for emerging markets is "unpredictable at best," and the Japanese automakers could be affected by political rifts between China and Japan from time to time but they will keep creating employment and contribute to the Chinese market.