Increased demand for minicars is eroding domestic margins for Japanese automakers, the Financial Times reported.
It said young car buyers no longer see cars as status symbols like their parents did, boosting demand for small, less-profitable models. Competition has thus intensified with eight carmakers competing in the minicar segment, the report said.
Nissan Motor, Japan's second biggest carmaker today announced the launch of the new Pino minicar, citing increased demand for cars with engines sizes under 660 cc. The Pino, true to its marketing tagline of "Shift_lovely days," is an economical, easy-to-drive minicar, aimed at consumers looking for a personal vehicle that is ideal for everyday driving.
Nissan Motor said it plans to sell 2,500 units a month of the new Pino minicar, taking advantage of growing demand for fuel- efficient cars .
The Pino will be built for Nissan by Suzuki Motor, and will be Nissan's fourth minicar.
"Minicars are the segment that all the domestic automakers want to be part of at this point," said Koji Endo, a senior analyst at Credit Suisse Group in Tokyo, who rates the company's shares as "outperform." "It will help Nissan lure customers to buy bigger cars after first capturing them as entry-level buyers."
The report said sales of larger vehicles in Japan fell more than 5 pct in 2006, while sales of mini-cars rose 5 pct.
Suzuki's Wagon R, a mini-vehicle, was the best-selling car in Japan last year for the third consecutive year.
