Northern, WI 05/20/2013 (usmarketsdaily) - The kei car jointly developed by Nissan Motor Co. (TYO:7201) (Closed: JPY 1,225.00, Up by 5.60%) and Mitsubishi Motors Corp. (TYO:7211) (Closed: JPY146.00, Up by 12.31%) is all set to roll out into the market by next month. The increasing attractiveness of smaller and cheaper vehicles among Japanese consumers had encouraged the Yokohoma, Japan based automaker to move into this market.
The new mini car developed by Nissan Motor Co. (TYO:7201) would be named as Nissan DAYZ and Mitsubishi Ek Wagon, the production of which had begun at the plant of Mitsubishi Motors Corp. (TYO:7211) in Okayama. The joint venture between the two companies to develop mini cars was materialized two years ago to capture market share in a category which almost accounts for 38 percent of car sales in Japan.
The mini cars, which are popularly called as Kei cars are gaining the attraction of Japanese consumers for their ease of handling and economical affordability. Reports convey that these mini cars distinguished by yellow number plates account for seven of ten cars sold in Japan. With government lowering the purchase tax and insurance premiums and further relaxing on the proof of parking requirements, the mini cars had grown highly popular especially among the rural consumers.
However, it is also necessary to mention that the profit margins are very slim in this mini car segment where an automaker will have to sell as high as ten mini cars to gain the profits equivalent from sales of a normal passenger vehicle.