Tokyo Motor no-show? Japan snubbed as market shrinks

[MikeCR-Z]

Tokyo Motor no-show? Japan snubbed as market shrinks

* No major foreign carmaker to exhibit at Tokyo Motor Show

* Japan market seen shrinking to 32-year low in year to March

* Government incentives limit fall, but impact limited

* Floor space, world premiere car models to halve

TOKYO, Oct 13 (Reuters) - The list of participants at the Tokyo Motor Show says it all: the Japanese car market is sinking into irrelevance.

At least that's the mood ahead of the biennial event opening next week as one carmaker after another cancelled their attendance, leaving just two boutique brands from overseas -- Lotus and Alpina.

It's a sea change from two years ago, when top guns from Volkswagen (VOWG.DE), Daimler (DAIGn.DE) and BMW (BMWG.DE) all flew in to jazz up their booths despite their cars' limited presence in the world's third-largest auto market.

The rare, razor-thin turnout at the Tokyo Motor Show -- traditionally considered one of the industry's five big international shows -- underscores the waning fortunes of Japan's once-buoyant market.

Demographically, Japan is suffering the double blow of a shrinking population and a rapid exodus from the countryside to cities, where owning a car can be a hassle due to expensive parking lots and congested roads. Auto executives also blame a fading interest in cars among young Japanese.

In Tokyo, home to a tenth of Japan's population and counting, car ownership is under 0.5 per household, or less than half the national average.

For a graphic on Japanese car sales click on: here

Add to that the financial crisis that has many automakers losing money and it is little surprise that some members of the Japan Automobile Manufacturers Association (JAMA) had initially proposed doing away with the Tokyo Motor Show all together this year. The four domestic truck makers all pulled out early on.

For the financial year to March, JAMA, the industry's lobby group, is forecasting a 32-year low in sales of new cars and trucks of about 4.3 million units, down 8 percent from last year.

The government has helped stem some of the sales slide with reduced taxes since April on less-polluting cars, especially hybrids, and a separate scheme to reward new purchases to replace cars older than 13 years.

But unlike in the United States or Europe, the response has been far from dramatic, with sales finally breaking a 13-month decline in September with a modest 0.2 percent rise. Questions also hang over whether the tax incentives will remain in place for three years as planned with a new government in place.

Read full article at Reuters - Autoshow