April 2013

Small and Mini-Sized Truck Market Trends Summary of Results of JAMA’s Fiscal 2012 Survey

The Japan Automobile Manufacturers Association has released the results of its small and mini-sized truck market survey conducted in fiscal 2012 (ending March 31, 2013).

This survey is conducted once every two years to monitor shifts in the demand structure for small and mini-sized trucks by tracking periods of ownership, purchases, and patterns of use. This survey also sought to determine the extent of:
- Future vehicle purchasing intent;
- Awareness of and response to environmental issues; and
- Changes in demand for trucks and vans among farming households.

Survey results highlighted the following trends:

Bearish sentiment in regard to the current business environment and freight transport activity, reflecting the impact of the strong yen, deflation, and other adverse factors, with outlook projections also severe.
A continuing decline in unit ownership (i.e., in the number of units owned per owner), with no shift away from the trend to delay replacement purchases but, in the event of such a purchase, a growing trend to downsize from a small truck to a mini-sized one.
Among corporate operators, the attribution of declining unit ownership to the economic slump, shrinking freight volumes, fewer employees, and higher fuel prices.
Virtually no changes in use patterns, but, in some cases, notably active use in areas that were damaged by the March 2011 earthquake and tsunami.
With regard to future purchasing intent, a strong inclination among owners to replace current vehicles with the same model choices, with a small number of corporate operators reporting a desire to downsize to smaller models or reduce the size of their fleets.
No substantial changes tracked in levels of awareness of environmental issues, but some indication of a growing appreciation of the practicality of alternative energy-powered vehicles in the face of fluctuating fuel prices.
A focus on mini-trucks among farming households in terms of both currently-owned vehicles and future replacement purchases, with some households (constituting only a small part of this market segment) expressing the intent to expand their business.

[For Reference]

JAMA’s Fiscal 2012 Survey of Small and Mini-Sized Truck Market Trends
Survey Implementation Outline and Results

1. Survey Implementation Outline

Survey scope	Individual users	Corporate operations
Survey area (Survey medium)	Nationwide (Via in-person distribu- tion)	Within a 50-km radius of metropolitan Tokyo / Within a 30-km radius of Osaka or Nagoya (Via in-person distribution)
Survey targets	Owners of small and mini-sized trucks for individual use	Commercial enterprises with five or more employees
Valid responses	1,290	578
Survey period	September 10- October 16, 2012	September 10- October 29, 2012

2. Survey Results

2.1 Trend: Bearish sentiment in regard to the current business environment and freight transport activity, reflecting the impact of the strong yen, deflation, and other adverse factors, with outlook projections also severe.

The business environment for corporate operators remained severe, amid the global economic slowdown under the impact of the sovereign debt crisis in Europe, among other factors, and Japan’s own economic doldrums owing to the strong yen and deflation.
More corporate operators than in the 2010 survey saw tough times ahead for the economic and business environment outlook. Among freight carriers, however, the number of businesses projecting deteriorating conditions was in decline.

2.2 Trend: A continuing decline in unit ownership, with no shift away from the trend to delay replacement purchases but, in the event of such a purchase, a growing trend to downsize from a small truck to a mini-sized one.

Fewer vehicles in the small and mini-sized truck category per owner was a continuing trend, as was the pattern of delaying truck replacement purchases. No changes were seen in model mixes.
Despite declining unit ownership per owner, unit sales in this category in fact increased in 2012, buoyed by tax incentives and subsidies for eco-friendly model purchases. Some 30% of new-vehicle buyers said that the combination of incentives and subsidies persuaded them to buy.
Another continuing basic trend was the replacement of trucks in this category with same-class, same-model trucks, although more respondents than in the 2010 survey reported downsizing from a small truck to a mini-sized one.

2.3 Trend: Among corporate operators, the attribution of declining unit ownership to the economic slump, shrinking freight volumes, fewer employees, and higher fuel prices.

The percentage of corporate operators reporting decreased truck and van ownership in this category was greater than the percentage reporting increased ownership. Among freight carriers, the percentage reporting decreased ownership was particularly high.
The reasons cited for declining unit ownership included shrinking freight volumes, fewer employees, and cost cutting. Other contributing factors that were cited included higher fuel prices, yen appreciation, and the March 2011 earthquake and tsunami. Among those reporting increased ownership in this category, the most frequently cited reason was business necessity.
While there was a greater shift from mini-sized to small trucks among freight carriers, the overall trend, in terms of vehicles owned by businesses, was towards purchases of smaller trucks.
Corporate operators who were reducing unit ownership in this category specifically cited a general deterioration in the business environment and, in addition to shrinking overall freight volumes, reductions in cargo sizes.
On the other hand, unit rates of use increased from those reported in the 2010 survey, apparently owing to such factors as declining unit ownership and other cost-cutting measures as well as the outsourcing of freight transport to third parties.

2.4 Trend: Virtually no changes in use patterns, but, in some cases, notably active use in areas that were damaged by the March 2011 earthquake and tsunami.

In response to questions concerning use patterns, no significant changes were reported, whether in regard to use purposes, driving distances, or truck-loading rates. However, corporate operators who increased unit ownership cited growth in freight deliveries to households and other recipients.
Respondents in areas that suffered damage from the March 2011 earthquake and tsunami reported higher truck-loading rates and increased driving distances.
Selective use of trucks in this category was greater among corporate operators owning both small and mini-sized trucks and at construction and freight transport firms with high rates of internal freight movement.

2.5 Trend: A strong inclination among owners to replace current vehicles with the same model choices, with a small number of corporate operators reporting a desire to downsize to smaller models or reduce the size of their fleets.

A continuing pronounced trend among respondents was their stated desire to stay with the same truck class and model for their next replacement purchase.
Nevertheless, respondents citing their inclination to downsize to a mini-vehicle were slightly more numerous among owners of small cab-over-engine vans and “bonnet” vans than among owners of other vehicles.
Although a majority of respondents reported having no future plans to change either the number of units they owned or the ratio of small trucks to mini-trucks in their fleets, the percentage that reported an inclination to decrease their fleet size was larger than the percentage that reported an inclination to increase it. Similarly, respondents inclined to increase the ratio of mini-trucks in their fleets were more numerous than owners inclined to purchase more small trucks.
Moreover, in the event of a replacement purchase of a different vehicle type within this category, the number of respondents favoring the purchase of a small or mini-sized cab-over-engine van outnumbered those favoring the purchase of a small or mini-sized truck.

2.6 Trend: No substantial changes tracked in levels of awareness of environmental issues, but some indication of a growing appreciation of the practicality of alternative energy-powered vehicles in the face of fluctuating fuel prices.

Respondents’ awareness of automotive-related environmental issues was essentially unchanged compared to the 2010 survey, but a larger percentage of them perceived a cost burden involved in addressing those issues. In regard to the measures available for addressing specific issues, awareness levels were as high as in 2010.
Compared to the 2010 survey, there was a slight retreat from respondents affirming their perception 1) that these vehicles provide excellent environmental performance and 2) that their use reflects a sense of social responsibility. On the other hand, more respondents indicated an appreciation of their practicality in terms of providing a buffer against fluctuating fuel prices. Concerns about high sticker prices for these vehicles were, meanwhile, less pronounced.

2.7 Trend: A focus on mini-trucks among farming households in terms of both currently-owned vehicles and future replacement purchases, with some households (constituting only a small part of this market segment) expressing the intent to expand their business.

Some 75% of farming households reported no change in their business environment. Among households farming full time, among households whose members did not exceed 64 years in age, and among households owning small-size trucks, however, there were more respondents who reported improvements in the business environment than respondents who did not. Within these subsegments, the ratio of households with plans to expand their business was higher than for other farming households.
Results for this market segment showed no retreat from the focus on mini-sized trucks, in terms of both current ownership and future replacement purchases. There was also little change in the number of units owned by these households.

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