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Japan – GDP – exports – manufacturing – autos – Toyota

Posted By Prieur du Plessis On February 24, 2010 @ 11:34 am In Guest Bloggers,Japan | No Comments


This post is a guest contribution by Rebecca Wilder, author of the of the News N Economics [1] blog.

Forget the Eurozone for just a minute. Japan’s problems are big: Toyota is a major exporter/employer. Last year 48% of all new standard passenger vehicles [2] sold in Japan were Toyotas (or its Lexus brand). The WSJ article describes [2] Toyota’s status in Japan as the following:

In short, Toyota is to Japan what General Motors Corp., in its heyday, was to America. And for a beleaguered country that has suffered a series of institutional blows in recent months – the collapse of the long-ruling political party, the bankruptcy of its champion national airline, a renewed bout of deflation – the global humiliation of Toyota may be the most psychologically damaging blow of all.

Psychological blow, what about an explicit economic blow! Toyota is certain to drag the only Asian G7 economy down, since auto exports are big in aggregate export income.

rw2402 [3]

Japan’s single largest export category in December was, of course, manufacturing: 22% of total exports. And a huge 14% of the total value of exports in December came from motor vehicles [4] (auto sales, that is – separate from parts).

The Japanese economy grew 1.14% in Q4 2009 with a huge 0.67% contribution from exports. The second major contributor was private consumption, which added 0.39%. Going forward, consumption and export contributions are likely to wane from the major Toyota recall campaign that is under way.

First the direct export channel will probably crumble as demand for Toyota cars derails. Second, there will be a lagged labor market effect. Sure, workers will be needed to address the recalls; but the loss in hours stemming from a drop in sales is likely to be much larger, and the net jobs effect negative.

Toyota is a major employer in Japan that currently has 320,808 employees [5] and has already shuttered doors (at least temporarily) in [6]other countries [6]. It’s only a matter of time before the effect hits the home labor market.

This is big. I wouldn’t be surprised if the IMF downgraded its forecast of Japan [7] based solely on Toyota’s misstep.

Source: Rebecca Wilder, News N Economics [8], February 22, 2010.

Did you enjoy this post? If so, click here to subscribe to updates to Investment Postcards from Cape Town by e-mail. [9]

More on this topic (What's this?) [10]
Godzilla Will Come Out of Tokyo Bay Before Japan Rebounds [11] (Money Morning, 2/2/12)
Big Drop in Japan’s GDP [12] (Wall Street Daily, 2/14/12)
New Prius Model Increases Fuel Economy While Decreasing Price [13] (Green Chip Stocks, 2/9/12)
Read more on Toyota Motor [14], Investing in Japan [15], Exports [16] at Wikinvest [17]

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URL to article: http://www.investmentpostcards.com/2010/02/24/japan-gdp-%e2%80%93-exports-manufacturing-%e2%80%93-autos-%e2%80%93-toyota/

URLs in this post:

[1] News N Economics: http://www.newsneconomics.com/

[2] 48% of all new standard passenger vehicles: http://online.wsj.com/article/SB10001424052748703357104575044761211965140.html?mod=WSJ-hpp-LEFTWhatsNewsCollection

[3] Image: http://4.bp.blogspot.com/_Et4TQ-a0gGU/S4KnVtNtsMI/AAAAAAAAC3s/aqMadcHwI1k/s1600-h/japan_gdp.PNG

[4] motor vehicles: http://www.customs.go.jp/toukei/shinbun/trade-st_e/2009/200912de.xml#pg3

[5] 320,808 employees: http://www2.toyota.co.jp/en/about_toyota/overview/index.html

[6] : http://business.timesonline.co.uk/tol/business/industry_sectors/industrials/article7032980.ece

[7] IMF downgraded its forecast of Japan: http://www.imf.org/external/pubs/ft/weo/2010/update/01/index.htm

[8] News N Economics: http://www.newsneconomics.com/2010/02/japan-gdp-exports-manufacturing-autos.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NewsNEconomics+%28News+N+Economics%29

[9] Did you enjoy this post? If so, click here to subscribe to updates to Investment Postcards from Cape Town by e-mail.: http://www.feedburner.com/fb/a/emailverifySubmit?feedId=921608&loc=en_US

[10] (What's this?): http://www.wikinvest.com/blogger/wikinvest_wire

[11] Godzilla Will Come Out of Tokyo Bay Before Japan Rebounds: http://moneymorning.com/2012/02/02/godzilla-will-come-out-of-tokyo-bay-before-japan-rebounds

[12] Big Drop in Japan’s GDP: https://www.wallstreetdaily.com/2012/02/14/japanese-gdp

[13] New Prius Model Increases Fuel Economy While Decreasing Price: http://www.greenchipstocks.com/articles/prius-c-fuel-economy/1517

[14] Toyota Motor: http://www.wikinvest.com/stock/Toyota_Motor_(TM)

[15] Investing in Japan: http://www.wikinvest.com/industry/Investing_in_Japan

[16] Exports: http://www.wikinvest.com/metric/Exports

[17] Wikinvest: http://www.wikinvest.com

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