TOKYO, Sept. 2, 2024—A data stream tells a whole story about Japan’s wealth distribution: That the rich is getting richer and less well-to-do poorer is underscored by soaring sales of luxury cars, especially imports, and in contrast, overall car sales remained sluggish, inevitable for the country’s progressing population contraction.
In 2023, a total of 7,406 cars priced above 20 million yen ($135,000), nearly a 7-times growth over 1,146 in 2013, according to Jaapan Automobile Importers Association statistics. Total imported car sales were 246,735, shrinking 12 percent from 2013.
Japan’s aggregate domestic new car sales in 2023, domestic makes and imports combined, rose 13.8 percent to 4.779 million, the first rise in 5 years owing to the easing of the semiconductor crunch gripping the industry since the COVID-19 pandemic erupted.
The overall car sales rise is seen in the industry to be short-lived, lasting only a few years, as the Japanese population moves to de-motorize amid progressing urbanization from rural areas and experiences growing poverty resulting in recent years from spiking inflation, prompting people to give up owning cars and instead rent when needed.
The numbers also underscored a tale of two cities: the rich accumulating more wealth to enabling them to be squanderers for Ferraris, Aston Martins, Lamborghinis, McLarens and other supercars.even though drivers must struggle to negotiate through narrow streets so it doesn’t make sense to own expensive ones other than for show-off and expectations for storing value. Those four brand sales skyrocketed over the 10 years.
Is this Lamborghini vs. VW Golf gap a sign of wealth divide of people that welcome inflation to increase their net worth and those that are huffing and puffing about spiraling grocery prices? Will supercar sales be sustainable as the wealth divide accelerates further? And what kind of people buy those super expensive cars?
The answer to the first two questions is a resounding Yes.
A former imported car industry official Sept. 1, 2024 told me that while the landscape is complex, one trend stands out: Real rich Japanese people do not buy such cars. ‘They are shy about showing their wealth, in fact, they tend to hide it,’ he said, explaining that Porsche Japan laments about selling their cars to many contemporary buyers. ‘Their knowledge about Porsche is almost zero but they have the money.’
Recent buyers’ profiles are something like this: Young tech types that started successful websites; those that inherited assets from their parents; the elderly that do not want to leave what they have behind when they dies and go on a spending binge. Plus, foreign nationals, particularly Chinese that succeed in running businesses, such as scrap metal collection, merchandise trade, restaurants.
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