Japan Minimum Wage:

 https://mainichi.jp/english/articles/20210712/p2a/00m/0op/010000c

Article: 

Discussion in a labor ministry panel on raising the minimum wage in Japan is approaching its final stages. The move would mark the second time since the outbreak of the coronavirus in 2020 for the minimum wage to be revised.

From fiscal 2016, the minimum wage had been raised by at least 3% for four consecutive years. But due to the effects of the coronavirus last year, the national average was raised by just 1 yen to reach a weighted average of 902 yen (about $8.19) per hour.

The role of a minimum wage is to guarantee an income under which people can live. But at 900 yen an hour, even if a person works a full 40 hours a week, the amount they earn in a year would be under 2 million yen (about $18,160).

Ideas:

The minimum wage is supposed to help low income workers have somewhat of a livable wage. But unfortunately, in some cases, it doesn't have that affect.

In some cases or many cases the person earing the minimum wage doesn't work enough hours to help the live.

Sometimes, it because they are only part-time workers and the company won't give them more hours and or they can't work more hours.

Sometimes there are company budget restraints, in that a company just can't afford to have part-time workers too many hours.

And sometimes a company might actually reduce worker hours because the minimum wage, when it was raised is cutting too much into the companies profit margin, maybe for example at franchise convenience stores that operate already on very thin profit margins.

Article:

By international standards, Japan's minimum wage is low. In Britain, Germany and France, even amid the outbreak of the coronavirus, the minimum wages of those countries have risen by around 1% to 2% a year.

A proper increase in the minimum wage is necessary to ensure that the pay gap between those in regular and nonregular employment does not widen.

In the annual spring labor offensive, in which labor and management in Japan negotiate wages, there has been a trend for wages to increase primarily for regular employees, even under the coronavirus pandemic.

Ideas:

The European countries for many years have made the social welfare of it citizens a priority including a high minimum wage with yearly wages.

Japan is a little behind the game with regards to a livable minimum wage.

In the 70's 80's and most likely 90s' the income gap globally was not a major challenge and or wasn't thought of a a major problem.

But ever since the 2008 Financial Crisis the income gap among workers and the overall population in countries as received a lot of attention.

Its also estimated that now upwards of 30 percent of all workers in Japan are either contract or part-time, and possibly many of these workers are not only making a minimum wage.

Of course companies want to reduce costs but it can have an affect on the economy.

For example those who don't have a wage that is equal to or similar to regular workers, have less income to spend. With less to spend or disposable income, it can affect the economy, as consumer spending some say it up to 50 percent of Japan's GDP.

Article:

At the same time, many nonregular workers are employed in the restaurant and retailing industries, and for them the effects of an increase in the minimum wage are large. Even during the spread of the coronavirus, workers in these industries have been providing services that are essential for our daily lives. Efforts must be made to provide them with better remuneration.

Disparity between regions is also a problem in Japan. Tokyo has the highest minimum wage in the country, at 1,013 yen (about $9.20) per hour, which is more than 200 yen per hour higher than the minimum wage in some other prefectures, such as Akita. Even when factoring in price differences in those regions, the delay in improvements in regional areas is clear.

Ideas:

Of course the difference in the minimum wage among the regions might be related to overall costs in a region, as Tokyo and Osaka are more expensive to live in than the provincial small areas.

Yes, many of the workers in the hospitality and services industry don't make a lot and they need to be compensate even more. And yes they are on the front lines, meaning they come in contact with people everyday during the pandemic time.

But even without the pandemic most of the workers in services don't make enough.

And again it can have a huge impact, eventually, on the economy, as their extra income, after paying their monthly bills is not enough to go out and use it in the economy. 

So they are a group that is not able to participate fully in the economy compared to full-time workers.

Article:

The government, which last year adopted a stance of prioritizing job retention over increasing wages, has set a goal of increasing the minimum wage to "an average of 1,000 yen at an earlier stage." Managers, however, are asking for the current level be maintained, on the grounds of worsening earnings. Indeed, the restaurant, accommodation and other industries have seen major declines in demand due to the spread of coronavirus infections. If the minimum wage increases, it will inevitably have an impact on their management.

To enable these industries to raise employees' wages, the government should introduce measures to help improve their performance. It is essential to enhance subsidy programs while listening to the voices of people in the field.

Article:

This situation is exactly what is going on in a country next to Japan. The government has raised the minimum wages in steps over the past few years, but many companies are unable to maintain a profit.

What they companies have done, as mentioned above, restaurants, convenience stores, small factory companies have laid off workers and or cut worker hours to maintain some kind of profit margin.

The companies just can't survive with the current minimum wage.

And now the the pandemic and the decreasing demand many of them are not surviving.

But what some of them have done is moving into the automation of some services such as fast food places where they use kiosks for customers to order food instead or having workers for that service. The same is happening at some convenience stores.

Just like what Uniqlo and GU have done in Japan with checkouts locations in the stores. And of course some restaurants have kiosk for customers to order and then get their ticked and wait for their order.

Subsidy programs were also used in the country next to Japan, but it didn't seem to help much.

Article: 

Major companies also have a big role to play. In the manufacturing industry, subcontractors may have to raise the prices of products in some cases to cover wage increases. Consideration should be given to the actual state of affairs.

Precisely because of the downturn caused by the coronavirus crisis, the government must create an environment enabling the minimum wage to be raised. That will help lift Japan's economy.

Ideas:

Yes, even in the country next to Japan many subcontractors or small companies have had to raise product prices as a way to cover costs.

But also, there is another problem called "market power." Many of the big companies dictate to the smaller subcontractor companies what prices they will pay. 

So even if the smaller subcontractor wanted to raise prices to cover its increased salary costs the larger company will reject the prices as they have all the market power, and as such the smaller companies don't make a profit.

Yes, if done correctly an increase in the minimum wage will help the workers. In turn they might have more extra or disposable income which means they can participate more in the economy, spend more, and the economy will grow faster.

Its a major problem in the country next to Japan.

Have a nice day and be safe!

Japan June Wholesale Prices:

 https://mainichi.jp/english/articles/20210712/p2g/00m/0bu/074000c

Article:

TOKYO (Kyodo) -- Wholesale prices in Japan surged 5.0 percent in June from a year earlier, due to rising commodity prices amid hopes for an economic recovery from the coronavirus pandemic, Bank of Japan data showed Monday.

The prices of goods traded between companies marked the fourth monthly increase and followed a revised 5.1 percent rise in May.

Among major gainers, petroleum and coal products jumped 42.0 percent from a year earlier, and nonferrous metal prices gained 37.6 percent.

Ideas:

The rise of prices can sometimes, be related to two ideas; the first being the expectation of increased demand for certain products in the future.

Or the already increase in demand for products.

But to see the increase in prices from a year earlier of course is or was related to a decrease in demand when the pandemic hit a year ago.

Also domestic and global logistical challenges might have contributed to the increase in prices.

Article:

As economic activity picks up in parts of the world where COVID-19 vaccinations have progressed, demand for products such as woods and scrap also rose. Prices of lumber and wood products increased 18.6 percent, while those of scrap soared 74.8 percent, the BOJ data showed.

"The global economic recovery boosted prices of commodity and a wide range of products," a BOJ official said.

Japan's economy has benefited from rising demand from its major trading partners such as the United States and China. But the country is still battling with rising coronavirus cases, with Tokyo placed under a fourth COVID-19 state of emergency less than two weeks before the Tokyo Olympics.

Ideas:

The global economy is/was on track for some kind of recovery, but with the surge in the variants now, Q3 and the summer period might not be as robust as expected.

It seems in many countries the variants has increased despite the continued vaccination globally.

However, at the same time, Japan and South Korea, seemed to have been hit especially hard related to the new variants

Not to place blame, but most likely in both countries, either a lack of supply and or a lack or getting enough vaccines might be causing some challenges now.

Article:

Inflation worries have emerged in the United States and some European nations in recent months. Japan has so far not seen such concerns emerge as the BOJ is still far from achieving its 2 percent inflation target. Wholesale prices affect consumer prices.

Companies are seen as reluctant to pass surging raw material costs onto consumers at a time when demand remains subdued. But their failure to hike prices could hurt their profits, economists say.

Import prices gained 28.0 percent from a year earlier while those of exports increased 11.3 percent, both on yen terms.

Ideas:

Inflation might be considered both a positive or a negative depending on which side of the equation you are on.

If you are a consumer, such as a person or household or even a business consumer, buying from another business, a rise in prices might not be a positive.

But if you are a supplier, inflation might be seen as positive to you, as now there is more demand for your products

Of course as a supplier, if you have to buy intermediate products for your final products, and the prices of those products are increasing, then you might not like that.

So then you might "pass on" the increased costs to whomever buys your final products in the marketplace.

Yes, suppliers might be reluctant to "pass on" the increased cost to buyers, but at one point, to survive, they might have to decide how much can they afford pass on in order to survive, without losing a lot of sales.

As far as the BOJ 2 percent inflation target is concerned, it seems since about 2013 the BOJ has been targeting inflation to help the economy, but without much success.

Perhaps at this time, and especially with the idea that demand is very low in Japan, the BOJ should shelve the idea of trying to reach a 2 percent target, and focus more on helping businesses survive, especially now with an increase in the variants and the new and continued emergency measures in place.

The idea that this summer is going to be somewhat back to normal looks like its not a possibility as of now.

The BOJ and and the Japanese government need to continue to help as many businesses as they can survive.

And when they are helping businesses they are helping consumers, and businesses are consumers too with families.

Demand is not going to get back to normal anytime soon, and the 2 percent inflation rate will not be reached anytime soon until most businesses and most consumers finally feel good about the economy, their jobs, their businesses, and their future.

Have a nice day and be safe!

Japan Economy Watcher Sentiment:

 https://mainichi.jp/english/articles/20210708/p2g/00m/0bu/053000c

Article:

TOKYO (Kyodo) -- Business sentiment among workers with jobs sensitive to economic trends in Japan improved in June for the first time in three months, as a state of emergency over the coronavirus pandemic was lifted in most of the country, official data showed Thursday.

The diffusion index of confidence in their current conditions compared with three months earlier among "economy watchers," such as taxi drivers and restaurant staff, soared 9.5 points from May to 47.6, according to the Cabinet Office.

A reading above 50 indicates that more respondents feel conditions are improving rather than worsening.

Ideas:

Economy watchers, as they are called, have good reasons to be concerned about the state of the economy and the virus situation, as economy watchers work in the services industry and as such people to people contact can be very stressful during this time.

The services industry is always the industry that is hit hard whenever the Japanese government decides on a new state of emergency.

And now, even if they don't customers demand is still very low among many of the services in industry companies and businesses.

Customer demand/consumer demand, most likely, for the remainder of the summer is going to be much lower than the pre-pandemic levels, as the new variants are also now in Japan and customers are still not sure what is going on.

However, as I watch and look at some YouTube videos related to some people walking around Tokyo at night, it seems not everyone is concerned about the virus situation, as I see some people without masks on and there seems to be a lot of people out and about in Tokyo in the main entertainment areas.

Article:

The office upgraded its assessment of the economy for the first time in three months, saying, "Although the coronavirus pandemic still has a severe impact on the economy, it is picking up."

The government's third state of emergency over the virus, which initially covered Tokyo, Kyoto, Osaka and Hyogo from April 25, was repeatedly extended and expanded to 10 prefectures.

The measure was lifted on June 20 except for the southern island prefecture of Okinawa, but Tokyo and six other prefectures shifted to a quasi-state of emergency, which carries fewer restrictions on business activity and targets high-risk areas rather than entire prefectures.

Ideas:

Yes, agreed, the pandemic still has a severe impact on the Japanese economy, and yes, there are areas or parts of the economy that are beginning to increase.

The manufacturing industry probably is almost back to normal, except for the so-called semiconductor chip shortage, as Japanese exports in recent months are reaching new levels.

But the services sector is still not where is should be and especially specific parts of the industry such as tourism, restaurants, hotels and so on.

Of course not allowing international tourists into Japan for the Olympics has further hurt the services industry.

And even not allowing Japanese spectators in the events in and around Tokyo is going to hurt the services industry even more.

Article:

The office polled 2,050 workers from June 25 to 30, of whom 1,820, or 88.8 percent, responded.

Under the virus emergency, people are asked to stay home and restaurants and bars serving alcohol to suspend operations. Dining establishments not offering alcohol are requested to close early.

"Sentiment in the food service industry is still at a low level, but it significantly rose as the virus emergency ended in many areas," a government official told reporters.

Ideas:

Its understandable that the government wants to limit the spread of the virus situation by limiting alcohols in restaurants.

But at the same time, these restaurants should be compensated for their losses as much as possible.

The food services industry is going to take a while to come back. But how many small and medium sized food service companies are going to go out of business before the industry gets back to some kind of "new normal."

The Japanese government and the Bank of Japan should do all they can to help food service businesses and try to prevent as many as possible from closing. 

Now is not the time for the idea of "let the market decide" on who survives the pandemic and who goes under.

Article:

In addition, the official said progress in the government's COVID-19 vaccine rollout has improved sentiment.

A department store worker in the Kinki region in western Japan was quoted as saying, "Sales increased as the operating hours were extended following the end of the virus emergency and customers enjoy shopping and dining out."

In June, the diffusion index gauging business sentiment regarding the coming months rose 4.8 points from the previous month to 52.4, following a 5.9 point growth in May. It topped 50 for the first time since February.

Ideas:

The vaccine rollout of course is going to improve sentiment, but it seems in recent weeks the supply challenges have returned. 

And most likely the vaccine challenges are going to cause further challenges throughout the summer and fall.

Yes, people want to get out and enjoy themselves and try to get back to some kind of normalcy in their lives, through shopping and dining out.

An increase of the diffusion index to 52.4 sounds good but its a very volatile index, meaning it can go up and down very easily. 

And a reading of 52.4 doesn't mean now everyone is happy are going to get back to "business as usual" as indexes can never 100 percent predict what people or businesses are really going to do in the future.

Article:

A hotel worker in central Japan's Tokai region expected the upcoming Tokyo Olympics and the progress of vaccination will "change the mood."

The sporting event is set to open on July 23 after a one-year postponement due to the pandemic, but games will highly likely be held without spectators at venues in the capital due to a recent spike in virus cases.

Ideas:

Yes, the Olympic games might be some kind of "change in mood", but at what level and how much because of the ban on foreign tourists and the ban on Japanese spectators at venues in Tokyo and the Kanto region.

And if restaurants are not allowed to serve alcohol or even allowed to have large groups gather the change in mood might not be that great.

Of course maybe some hotels and places in Tokyo that have some teams or officials staying there might help some but its still not as much as needed.

And the continued worry about the virus situation is not going to help the games and as a result the change in mood might not be that much.

Have a nice day and be safe!

Japan Household Spending:

 https://mainichi.jp/english/articles/20210706/p2g/00m/0bu/033000c

Article:

TOKYO (Kyodo) -- Japan's household spending in May jumped 11.6 percent from a year earlier, following a sharp increase the previous month, as it continued to rebound from a slump last year caused by the coronavirus pandemic, government data showed Tuesday.

Average spending by households with two or more people in real terms stood at 281,063 yen ($2,500), the Ministry of Internal Affairs and Communications said. The year-on-year gain was the second-largest since comparable data became available in January 2001, following a 13.0 percent spike in April.

Spending expanded for the third month in a row, starting with a 6.2 percent rise in March.

Ideas:

it is estimated that consumer spending is 50 percent of Japan's GDP or gross domestic product. As such its a very important part of the economy.

In most advanced economies consume spending it the largest part of GPD, and as such the services sector could be considered very important in Japan.

But the Bank of Japan is always concerned that consumer spending is not at its potential or not what spending should be in Japan.

But of that might be the fact that Japan has an ageing population and or the population is ageing at a faster rate than births as Japan also has a low birth rate.

But some other reports have shown that the age group between the ages of 20 and 65 in Japan, spend as much or more than the same age groups in other advanced countries. 

The problem is those in the 65+ age groups are becoming larger and larger every year and those age groups tend to spend less than the younger age groups.

Consumer spending might be increasing but its not where it should be.

Article:

In May 2020, household spending plunged a record 16.2 percent due to the government's first state of emergency over the pandemic, declared the previous month for Tokyo and six other prefectures and later expanded nationwide.

Requesting people to stay at home and nonessential businesses to suspend operations, the measure dealt a heavy blow to consumption until it was fully lifted in late May last year.

On a seasonally-adjusted month-to-month basis, however, spending in the reporting month fell 2.1 percent from April for the first decline in four months.

Ideas:

Because the virus situation is not going away but is actually getting worse the potential for consumer spending to increase or get back to the pre-pandemic levels might not happen anytime soon.

However, consumers might be thinking several things; they are tired of the pandemic and have pandemic fatigue and will eventually decide to just get out and spend. Or they feel the vaccinations are increasing and the feel safer to get out and spend. And they've waited long enough and they just to be out and about.

The only problem is the virus situation has exploded again so consumer will need to re-think their plans to get out and about.

And of course now is the Obon season, which usually means vacations and travel. So time will tell as to what people are going to do this Obon season.

Article:

A ministry official told reporters the nation's third virus emergency, effective from late April through mid-June for Tokyo, is believed to have weighed on private consumption.

In addition, when compared with a pre-pandemic level of May 2019, the latest average spending figure dropped a real 6.5 percent, the official said, expressing the view that the pandemic continues to affect consumption.

By component, outlays on transportation and communication surged 23.5 percent from a year ago, the biggest contributor to the overall outcome, supported by brisk purchases of cars and mobile phones. Spending on culture and recreation soared 24.0 percent as more people took trips and went to entertainment facilities than last year.

Ideas:

Its important to remember that Japan is the 3rd largest economy in the world. Yes a decrease of 6.5 percent in consumer spending is not good, but that 6.5 percent is not a complete drop in consumer spending. So there was still a lot of consumer spending. 

Was the purchase of cars a delayed purchase because of the pandemic in the spring of 2020 or was it Japanese consumers just felt it was time to buy a new car. And the same with mobile phones. Were delayed purchases or consumer just deciding its the right time to buy.

The spending on entertainment and trips, for the most part, can only be put off so long, all things being equal, meaning if consumers have a chance they will travel, even if it only domestically.

Article:

Expenditure on housing rose 28.9 percent and that on clothing and shoes increased 13.0 percent, also in reaction to the previous year's plummets.

Meanwhile, utility costs dipped 2.4 percent due to the previous year's high temperatures that increased power demand, the official said. Spending on furniture and household items, which include sanitizers and wet wipes, shrank 2.6 percent.

The average monthly income of salaried households with at least two people in May was down a real 2.6 percent from a year ago to 489,019 yen, as last year's income was boosted by 100,000 yen per person cash handouts by the government to help households cope with the pandemic. It followed a 2.8 percent rise the previous month.

Household spending is a key indicator of private consumption, which accounts for more than half of Japan's gross domestic product.

Ideas:

Maybe again housing purchases or spending on housing might be a delayed purchase or consumer just thinking its now the right time to buy.

But clothing and shoes might be a little different. As consumers are spending more and more online, maybe they feel don't want to buy some clothes and shoes online and they need or want to see the products in person before they buy.

As such as they now feel more comfortable going back to the brick and mortar stores purchases or those products increased. 

Its not surprising that household salaries might have been down slightly, as many companies were reluctant to give any kind of golden week bonus if that is calculated in the salaries.

And maybe this year the Japanese government didn't give households a 100.000 yen per person cash handout.

So a key question is what about the households that are part of the services sector. How are they able to survive if the business they are involved in is not doing so good still.

Consumer spending is a large part of the Japanese economy. But if many households are part of the services sector, and if they are related to a business that is not doing too good in the services sector, then they might be reluctant to spend or they might delay their spending and or only spend on the very basic needed to survive.

So the Japanese government maybe needs to find ways to help the businesses and the families in the services sector, such as restaurants, hotels. etc. because if they don't then consumer spending in the economy is going to remain low or very stagnant and will not reach the level needed for the economy to grow.

But of course there might still be subsidies given to restaurants or other places, but because the pandemic has been going on for so long is it enough after 18 months.

Have a nice day and be safe!

Bank of Japan Estimates:

 https://mainichi.jp/english/articles/20210705/p2g/00m/0bu/045000c

Article:

TOKYO (Kyodo) -- The Bank of Japan on Monday downgraded its economic assessments of two of the country's nine regions -- Chugoku and Shikoku -- as the pace of recovery from the coronavirus pandemic is slowing.

In its quarterly Sakura report for July, the BOJ raised its outlooks for two regions while maintaining its assessments of the remaining five, underscoring the uneven nature of economic recovery.

The Japanese central bank said the economy remains in a "severe situation" due to the impact of the pandemic but many reported that the economy has "picked up as a trend" or "started to pick up."

Ideas:

No economy grows at a linear rate, or equally, and certainly different areas of an economy don't rate at the same rate. 

As an economy is very complex, with many different sectors and many different types of businesses, an economy never see the exact growth in all sectors, all  areas, or all business.

And now you add in the pandemic situation and it creates even more imbalances in the economy.

Some areas might be some economic growth and some might see decreasing economic growth.

Before the latest pandemic surge there might have been some areas that were beginning to pick up, but now that the pandemic as exploded again, its not going to be easy for any area to see significant economic growth.

Article:

The two regions that saw upgrades were Kinki, which includes the western prefecture of Osaka, and Hokuriku in central Japan. The Kanto-Koshinetsu region centering on Tokyo was among the five regions for which assessments were maintained.

"For the time being, economic activity is expected to stay at lower levels than before the coronavirus pandemic," Governor Haruhiko Kuroda told a videoconference of BOJ branch managers before the release of the report.

Japan is battling to rein in rising coronavirus cases in urban areas amid worries about a further spread of the Delta variant, less than three weeks before the opening of the Tokyo Olympics.

Ideas:

The new virus strains will keep economic growth down for the time being. Most likely real economic growth might not be seen until the 3rd or 4th quarter as it seems the current virus situation is now even worse than the original situation last spring.

The problem is that people either are complacent now, have been vaccinated, and or are have pandemic fatigue meaning they are tired of waiting and or tired of not being able to do what they did before the pandemic.

But as I check some YouTube videos related to the Tokyo entertainment areas, is seem like normal as many people are out and about and even some not wearing masks.

This writing is actually during the Olympics and the virus situation is even worse now.

Article:

Economists and BOJ policymakers expect further progress in vaccinations in Japan will lead to more economic activity, helping the services sector that has lagged behind manufacturers in the pace of recovery.

The BOJ report said downward pressure on consumption of services remained in areas under a COVID-19 quasi-state of emergency such as Kanto-Koshinetsu, Tokai and Kinki.

Manufacturers such as automakers have seen a recovery from the pandemic much sooner than service providers, buoyed by strong demand in the United States and China.

Ideas:

Yes, the progress in vaccines should be good for increased economic activity, as some consumers will feel more confident getting out and doing things.

And yes, it should help the services sector some, but it is going to take some time before the services sector fully recovers.

But again, as of this writing, which several weeks after the publication date of this post, the virus situation has re-emerged as a major problem, and again might be a major factors on the services sector.

Manufacturing has recovered much faster, but not the problem of course, as reported in many article is the global semiconductor chip shortage, which again has been reported that some manufacturing factories are reducing their operations because of the shortage.

Article:

Chugoku was the only region in which the pace of a pickup in production was slowing down.

"We have been adjusting production of auto parts as automakers have cut output amid the shortage of chips since May," a company in the auto sector in Chugoku was quoted as saying in the report. "The impact of the shortage will likely ease gradually from August so we plan to ramp up production to catch up from this fall."

The Sakura report, named after its cherry blossom-colored cover, will be among the materials used at the BOJ's policy-setting meeting next week.

Ideas:

The slowdown the manufacturing sector related to the chip shortage comes as the Obon season, the traditional summer vacation season, begins in Japan. So there might be some slowdowns and or delays as the summer vacation season also interacts with the chip shortage and or course the virus situation all at the same time.

The fall most likely will be time when production will be back to normal, as more companies maybe by then have solved or found ways to overcome the chip shortage, and as more people become vaccinated full operations mostly will be taking place.

But the virus situation has not slowed down but has gotten worse. But the manufacturing sector seems to be able to keep going despite the virus situation.

Have a nice day and be safe!

Japan New Car Sales:

 https://mainichi.jp/english/articles/20210702/p2g/00m/0bu/014000c

Article:

TOKYO (Kyodo) -- New car sales in Japan increased 11.6 percent in the first half of 2021 from a year earlier, but fell short of a rebound from the pre-coronavirus pandemic level in 2019 due to a global shortage of semiconductors, industry body data showed Thursday.

Automakers sold a total of 2,464,586 units including minivehicles from the January to June period, rising for the first time in two years following the steep pandemic-induced fall in 2020, according to the Japan Automobile Dealers Association and the Japan Mini Vehicles Association.

Ideas:

New cars sales, not just in Japan, but globally, had been on the increase. An 11.6 increase from a year earlier, the not so good spring 2020, seems about right.

But of course it wasn't near the 2019 level. But that could've been expected as the global shortage of semiconductors has been a major challenge globally

And to make matters worse, Taiwan, a major semiconductor manufacturer, has recently been it with the new virus variants.

Taiwan, for a long time was able to handle the virus situation much better than many other places but now the variants have not reached there.

Article:

However, compared to the same period in 2019, sales fell 10.5 percent as the supply of chips was disrupted by the pandemic. Semiconductors are used in everything from smartphones and laptops to cars.

Excluding minivehicles, powered by engines no larger than 660 cc, sales rose 8.7 percent to 1,521,878 vehicles.

Ideas:

Yes, the semiconductor situation has made things not so good for any company making cars, smartphones, and laptops.

At the same time, was any company, aware of the coming shortage, or was there any news out there among the suppliers that this situation was beginning to take place.

And if they knew or when they knew were they able to unable to do anything about the semiconductor shortage.

And did they have any back up plans or strategies just in case a situation like this was going to happen.

It seems logical, especially in Japan, that smaller engines would have the most in sales.

But consumers, being consumers, often choose want they want regardless of logic or trends.

Article:

By brand, Toyota Motor Corp. saw sales up 14.1 percent due to high demand for its Yaris Cross SUV, which rolled out in August 2020, while those of Honda Motor Co. declined 10.7 percent, partially because the automaker had to temporarily halt some of its factories as it struggled to procure enough chips.

Sales of minicars grew 16.7 percent to 942,708 vehicles.

Ideas:

But then here, we see sales of minicars did increase.

 It again seems logical that smaller cars would be the preferred model for most buyers in Japan as gas might be somewhat more expensive than other countries and or fees for parking, including fees for parking spaces near where families live.

So it seems that Honda might not have a sufficient supply of chips as it didn't know or anticipate that there would be a shortage

And or because of the pandemic the number of cars produced each month was less than normal, so its supply waiting to be sold was less than needed just in case situations such as the chip shortage caused delays in production.

Toyota on the other hand, might have just been lucky in that is made enough of the Yaris Cross SUV before the chip situation began to happen, so its sales were not as afffected.

Article:

Daihatsu Motor Co.'s TAFT Mini Crossover newly launched in June 2020 lifted the automaker's sales up 23.3 percent, while sales of Suzuki Motor Corp. rose 19.3 percent.

In June alone, new car sales increased 5.3 percent to 365,631, according to the data.

An official from the Japan Automobile Dealers Association said sales will "continue to be affected," with some automakers possibly halting factory operations this month due to the lack of semiconductors.

Ideas:

Its still interesting, that Japan has a lot of car manufacturers, eight if correct? Of course some of these might be in some kind of partnership with the larger companies such as Toyota, Honda, and Nissan. 

As Toyota, Honda, and Nissan might be providing needed resources to help the smaller companies.

Its kind of like the Japanese airline industry, or even the airline industry in the US. There is JAL and there is ANA but then there are the smaller commuter, regional, or discount airlines relate to JAL such as J Air and some related to ANA.

So the same with the car industry in Japan.

Most likely, as the pandemic, unfortunately, as regained its momentum, it could affect the chip industry during Q3 and maybe into Q4 and car manufacturers, smartphone companies, and laptops makers wait for the chips industry to recover from the pandemic and the chip shortage.

Have a nice day and be safe!