Japan May auto sales drop 1.2 pct after April sales tax hike

TOKYO, June 2 Mon Jun 2, 2014 2:38am EDT

TOKYO, June 2 (Reuters) - Japanese auto sales in May dropped 1.2 percent from a year ago, industry data showed on Monday, as the pace of decline eased from the previous month when a sales tax hike sapped demand.

Automakers including Toyota Motor Corp and Honda Motor Co sold a total of 363,370 vehicles, data from the Japan Automobile Dealers Association and Japan Light Motor Vehicle and Motorcycle Association showed.

"We are seeing a slight improvement compared to April, but we are still at a low level," said Yoshitaka Hayashi, a director with the Japan Automobile Dealers Association. In April when sales tax rose by 3 percentage points to 8 percent, auto sales fell 5.5 percent.

Passenger car sales in May took a hit from the tax hike, dropping 6.9 percent year-on-year, while demand for minicars with an engine size of 660 cc or smaller rose 5.3 percent, helped by recent launches of popular new models.

Sales for Toyota Motor, including Lexus vehicles and 660 minicars, fell 10.1 percent to 98,472 vehicles.

Honda Motor sales grew 18.8 percent to 53,991 vehicles, backed by its Fit subcompact that went on sale in September, while Nissan Motor Co posted a 7 percent rise at 43,357 vehicles, helped by its Dayz minicar that went on sale in June 2013.

Auto sales in the financial year to end-March 2015 are expected to fall 15.6 percent from a year earlier to 4.75 million vehicles, the Japanese auto lobby had said in March. (Reporting by Yoko Kubota; Editing by Subhranshu Sahu)