TOKYO -- Sales of new cars, trucks and buses in Japan were slightly lower in May than in the same month last year, mainly because of a sharp drop in demand for cheaper minivehicles.
Total Japanese vehicle sales shrank 0.4 percent in May to 419,692, data released on Monday by two industry groups showed.
Economists closely monitor the figure because they are the first indicators of consumer spending released each month.
Sales of 660cc minivehicles, which receive preferential tax treatment, fell six percent to 128,329 units for the second straight month of decline, the Japan Mini Vehicle Association said.
That was offset to some extent by demand for minivans, defined as passenger cars with three rows of seats.
Thanks to the introduction of several new minivans recently including Mitsubishi Motors' Grandis last month, sales of full-sized vehicles grew 2.3 percent to 291,363 units, the Japan Automobile Dealers' Association said.
The latest results indicated that a sharp drop in overall sales in April was an aberration in reaction to sales campaigns in the final months of the business year to end-March, as well as a change in the 'green tax system' that made some models more expensive from April.
In the year to date, overall vehicle sales are up 1.8 percent.
"Most car makers have already adjusted to the narrowing of the 'green tax system' so there shouldn't be a big reaction to that in the coming months," a spokesman at JADA said.
Thanks to the popularity of new minivans and SUVs, sales of full-sized cars with engine displacement of more than 2,000cc jumped 13 percent in May, making up for a 0.1 percent fall in sales of compact cars.
All of Japan's top five automakers expanded their sales except Honda Motor Co., whose sales fell by double digits for a second consecutive month, partly in reaction to especially robust demand for its Fit subcompact last year.
Analysts have said Honda's sales figures appear worse than they really are because some of its cars made overseas, including the Element and Fit Aria, are counted as imports.
Fourth-ranked Mitsubishi Motors posted the biggest rise, with sales in May surging 67 percent. Fifth-largest Mazda Motor Corp. saw its sales grow 18 percent from a low base in the year-earlier month.
Toyota Motor Corp. and Nissan Motor Co. recorded sales gains of 5 percent and 1.2 percent respectively.