Car Sales Revive in Japan

Auto sales in Japan during July-September advanced 2% to 1.36 million compared with the same period in 2012, reversing three quarters of year-on-year shrinkage, according to industry trade groups.

September's volume surged 17%, the strongest monthly gain in more than a year and the first uptick since April. The Japan Automobile Manufacturers Assn. previously predicted the market this year would drop 12%.

Carmakers remain wary about the strength of the sales rally. Government incentives have propped up the market in the past, but analysts note that underlying demand has been slipping for decades as Japan's population ages and shrinks.

Prime Minister Shinzo Abe confirms he will press to boost Japan's sales tax to 8% in April 2014 and 10% in October 2015. Economists say the prospect of higher taxes may have boosted car sales last month. In August JAMA declared that boosting the levy without cutting other fees imposed on car buyers would deliver a "lethal blow" to the country's auto industry.