Aq Fall 98

New plants, new models launched as sales accelerate

Sales

For the first three quarters of 1998, Japanese light
vehicle sales have gained 14.5% in overall unit sales to 251,403 units, and over two
percentage points of market share to 23.4%. By contrast, the whole Canadian vehicle market
was up 4.2% through the end of September.

For JAMA Canada members, sales of passenger cars
rose 11.5% to 190,847 units; while light trucks, including minivans and sport utility
vehicles, jumped 25.3% to 60,556 units. Overall, 54.4% of Japanese sales in this period,
or 136,676 units, were built in North America, while 114,727 units were built in Japan.

Production shortages of some popular North American
built cars, coupled with strong demand in North America, required imported models to meet
customer demand. However, in the past six months, total vehicle shipments from Japan to
Canada have risen modestly, 3.2%. At the same time exports from Canadian operations of
Toyota and Honda have jumped 77.8% and 10.9% respectively.

In terms of industry ratios, in the first nine months of 1998
Japanese automakers continue to produce more than one vehicle in Canada for every one sold
in Canada (278,000 produced to 251,400 sold), and also continue to be net exporters of
finished motor vehicles (210,000 exported to 195,400 imported).

Source: AIAMC, DesRosiers

Production

Overall Japanese-affiliated vehicle production in
Canada has changed only marginally in 1998 to the end of the third quarter, down 0.3% to
278,705 units. However, a different picture emerges with individual companies.

Honda of Canada Manufacturing built 3.7% more units
than in 1997, a level of output which represents full capacity at their plant that makes
Civic and Acura EL models. The new minivan plant was not operational until the end of
September.

Toyota (TMMC) in Cambridge boosted output over 64%
in the nine months of 1998 to 120,878 units. This significant jump in production over last
year stems from Corolla production having shifted to the new 120,000 unit capacity plant
last year, and the addition of the new Camry Solara line coming on stream this summer.

CAMI production was shut down for most of the summer due to soft
demand primarily in the U.S. and the changeover to begin production of the new Suzuki
Vitara/Chevrolet Tracker in September. Consumer interest in the new Vitara compact sport
utility vehicle should boost CAMI production into 1999.

* estimated Source: JAMA Canada

Exports

Due to the high level of production in Canada that is exported,
exports for the most part, mirrors that of production. Total exports are virtually
unchanged at 210,422 units at the end of September. Honda (HCM) exports were up 10.9%,
Toyota (TMMC) up 77.8% and CAMI dropped 65.7% compared to 1997. Both Honda and Toyota
reported higher export ratios than last year, 74.4% and 74.5% versus 69.6% and 68.6%
respectively.

* estimated Source: JAMA Canada

Imports (Shipments)

Shipments of finished vehicles from Japan have
increased 22.5% over the first three quarters of 1998 compared to last year to 119,188
units from 97,320 units. However, most of this increase came in the first quarter of 1998,
as shipments have moderated considerably over the fiscal year period, April to September.
In this fiscal period, shipments rose 3.2% to 74,175 units from 71,903 units in 1997.

Shipments from the U.S. and Mexico have also grown,
up 14.3% to 76,213 units from 66,661 units for the January to September period. Together,
shipments are up 19.2%, reflecting strength of consumer demand in Canada.

Please note: there may be a lag of several months or more
between when a vehicle is shipped or imported and when it is finally recorded as a retail
sale.

* estimated Source: JAMA Canada

Poor economy stalls the auto industry in Japan

Signs of economic difficulty in the auto industry
are evident: production is down 10.2% through the end of September at almost 7.5 million
units; exports are showing signs of softening, down 0.2% to 3.4 million units; new vehicle
sales in Japan have fallen 13.5% in the same period to less than 4.5 million units; and
import vehicle sales have plunged 25.7% to 207,700 units for the first nine months of
1998.

It is abundantly clear that the economic crisis that
Japan is facing is having a serious impact on industries and consumers alike. What’s more,
it is unlikely that a recovery will come either quickly or painlessly.

In spite of the depth of this recession or the
comparisons with other periods of economic malaise, the silver lining for automakers and
other manufacturers is usually found in the often difficult process of becoming more adept
and more competitive at making things consumers need and want. While the timing is
uncertain, when the recovery is on track, the benefits arising out of structural and
cyclical economic renewal can be shared among all stakeholders including consumers,
retailers, and manufacturers.

source:

1,2 – JAMA

3 – JADA, JMVA

4 -JAIA

Suzuki named JAMA Vice Chairman and Executive
Managing Director

Takao Suzuki was appointed Vice Chairman and
Executive Managing Director of the Japan Automobile Manufacturers Association (JAMA), on
Saturday, July 18. Suzuki, who formerly served in Japans Ministry of International Trade
and Industry, has had a nearly three-decade-long career in government service, with
significant international experience. Immediately prior to joining JAMA, Suzuki was Senior
Executive Director of the Japan Finance Corporation for Small Business. Suzuki succeeds
Takao Tominaga who had served as Vice Chairman and Executive Managing Director of JAMA
since 1988.

F&P Manufacturing adds hydroforming operation

Toyota Cold Research Centre opens in Timmins

In October, Toyota Canada officially opened a Cold Research Centre in Timmins, Ontario.
This is the first dedicated R & D facility to be established by Toyota in Canada.

The new facility will provide a permanent Canadian base for extensive winter testing
program under actual severe winter and climate conditions that cannot be simulated in
Japan.

Located on 250 acres of land, the $1.2 million test centre will include vehicle
preparation facilities as well as an onsite test track. Fifty engineers employed by Toyota
are expected to work at the site each year, and spin-off benefits are expected to inject
up to $1 million annually into the local economy.

For More Information Contact:



JAMA Canada

Suite 460, 151 Bloor Street West, Toronto, Ontario, Canada M5S 1S4

Tel: 416-968-0150

FAX: 416-968-7095

Internet: [email protected]