Showing posts with label sales. Show all posts
Showing posts with label sales. Show all posts

Friday, March 14, 2014

Elon Musk Writes A Blistering Take Down Of Chris Christie And New Jersey"s Decision To Ban Tesla"s Sales Model (TSLA)

Elon Musk jokes about his job


Elon Musk wrote a blog post about Tesla’s troubles in New Jersey. 


Tesla’s direct-to-consumer sales model was banned in the state this week. The ban starts April 1. 


Musk’s post basically echos what he said last year about fighting the dealers. 


He doesn’t want Tesla to sell cars through auto dealerships because the dealers will have no incentive to sell electric cars. He says that all other cars that tried the dealership model have gone bust.


In this post he has pointed language for Chris Christie:


On Tuesday, under pressure from the New Jersey auto dealer lobby to protect its monopoly, the New Jersey Motor Vehicle Commission, composed of political appointees of the Governor, ended your right to purchase vehicles at a manufacturer store within the state. Governor Christie had promised that this would be put to a vote of the elected state legislature, which is the appropriate way to change the law. When it became apparent to the auto dealer lobby that this approach would not succeed, they cut a backroom deal with the Governor to circumvent the legislative process and pass a regulation that is fundamentally contrary to the intent of the law.


And later, he adds:


The rationale given for the regulation change that requires auto companies to sell through dealers is that it ensures “consumer protection”. If you believe this, Gov. Christie has a bridge closure he wants to sell you! Unless they are referring to the mafia version of “protection”, this is obviously untrue. As anyone who has been through the conventional auto dealer purchase process knows, consumer protection is pretty much the furthest thing from the typical car dealer’s mind.


Here’s the whole thing:


On Tuesday, under pressure from the New Jersey auto dealer lobby to protect its monopoly, the New Jersey Motor Vehicle Commission, composed of political appointees of the Governor, ended your right to purchase vehicles at a manufacturer store within the state. Governor Christie had promised that this would be put to a vote of the elected state legislature, which is the appropriate way to change the law. When it became apparent to the auto dealer lobby that this approach would not succeed, they cut a backroom deal with the Governor to circumvent the legislative process and pass a regulation that is fundamentally contrary to the intent of the law.


It is worth examining the history of these laws to understand why they exist, as the auto dealer franchise laws were originally put in place for a just cause and are now being twisted to an unjust purpose. Many decades ago, the incumbent auto manufacturers sold franchises to generate capital and gain a salesforce. The franchisees then further invested a lot of their money and time in building up the dealerships. That’s a fair deal and it should not be broken. However, some of the big auto companies later engaged in pressure tactics to get the franchisees to sell their dealerships back at a low price. The franchisees rightly sought protection from their state legislatures, which resulted in the laws on the books today throughout the United States (these laws are not present anywhere else in the world).


The intent was simply to prevent a fair and longstanding deal between an existing auto company and its dealers from being broken, not to prevent a new company that has no franchisees from selling directly to consumers. In most states, the laws are reasonable and clear. In a handful of states, the laws were written in an overzealous or ambiguous manner. When all auto companies sold through franchises, this didn’t really matter. However, when Tesla came along as a new company with no existing franchisees, the auto dealers, who possess vastly more resources and influence than Tesla, nonetheless sought to force us to sell through them.


The reason that we did not choose to do this is that the auto dealers have a fundamental conflict of interest between promoting gasoline cars, which constitute virtually all of their revenue, and electric cars, which constitute virtually none. Moreover, it is much harder to sell a new technology car from a new company when people are so used to the old. Inevitably, they revert to selling what’s easy and it is game over for the new company.


The evidence is clear: when has an American startup auto company ever succeeded by selling through auto dealers? The last successful American car company was Chrysler, which was founded almost a century ago, and even they went bankrupt a few years ago, along with General Motors. Since the founding of Chrysler, there have been dozens of failures, Tucker and DeLorean being simply the most well-known. In recent years, electric car startups, such as Fisker, Coda, and many others, attempted to use auto dealers and all failed.


An even bigger conflict of interest with auto dealers is that they make most of their profit from service, but electric cars require much less service than gasoline cars. There are no oil, spark plug or fuel filter changes, no tune-ups and no smog checks needed for an electric car. Also, all Tesla Model S vehicles are capable of over-the-air updates to upgrade the software, just like your phone or computer, so no visit to the service center is required for that either.


Going a step further, I have made it a principle within Tesla that we should never attempt to make servicing a profit center. It does not seem right to me that companies try to make a profit off customers when their product breaks. Overcharging people for unneeded servicing (often not even fixing the original problem) is rampant within the industry and happened to me personally on several occasions when I drove gasoline cars. I resolved that we would endeavor never to do such a thing at Tesla, as described in the Tesla service blog post I wrote last year.


Why Did They Claim That This Change Was Necessary?


The rationale given for the regulation change that requires auto companies to sell through dealers is that it ensures “consumer protection”. If you believe this, Gov. Christie has a bridge closure he wants to sell you! Unless they are referring to the mafia version of “protection”, this is obviously untrue. As anyone who has been through the conventional auto dealer purchase process knows, consumer protection is pretty much the furthest thing from the typical car dealer’s mind.


There are other ways to assess the premise that auto dealers take better care of customers than Tesla does. Consumer Reports conducts an annual survey of 1.1 million subscribers, which factors in quality, reliability and consumer satisfaction. The Tesla Model S was the top overall pick of any vehicle in the world, scoring 99 out of 100. This is the highest score any car has ever received. By comparison, in theindustry report card, Ford, which sells their cars through franchise dealers, received a score of 50. BMW, which makes competing premium sedans, received a score of 66.


Consumers across the country have also voiced their opinion on the sales model they prefer. In North Carolina, a Triangle Business Journal poll found that 97 percent of people polled said Tesla should be allowed to sell cars directly. A poll by the Austin Business Journal showed that 86 percent of respondents were in favor of direct sales, and in a Los Angeles Times poll 99 percent of respondents came to the same conclusion. These aren’t polls that we commissioned and there are many more like them. We have not seen a single poll that didn’t result in an overwhelming majority saying they preferred the direct model to the traditional dealer model. Democracy is supposed to reflect the will of the people. When a politician acts in a manner so radically opposed to the will of the people who elected him, the only explanation is that there are other factors at play.


Going Forward


Some reassurances are also in order. Until at least April 1, everything is business as usual for Tesla in New Jersey. It should also be noted that this regulation deals only with sales, so our service centers will not be affected. Our stores will transition to being galleries, where you can see the car and ask questions of our staff, but we will not be able to discuss price or complete a sale in the store. However, that can still be done at our Manhattan store just over the river in Chelsea or our King of Prussia store near Philadelphia.


Most importantly, even after April 1, you will still be able to order vehicles from New Jersey for delivery in New Jersey on our TeslaMotors.com website.


We are evaluating judicial remedies to correct the situation. Also, if you believe that your right to buy direct at a Tesla store should be restored, please contact your state senator & assemblyman:www.njleg.state.nj.us/districts/districtnumbers.asp.


Finally, we would like to thank the many people who showed up in Trenton on Tuesday to support Tesla and speak out against the MVC’s back-door tactics in passing this regulation change without public consultation or due process. It was an amazing response at very short notice and much appreciated.


Elon


Join the conversation about this story »





    








Politics



Elon Musk Writes A Blistering Take Down Of Chris Christie And New Jersey"s Decision To Ban Tesla"s Sales Model (TSLA)

Tuesday, February 18, 2014

Midday open thread: Bill tweet-teases Dubya, U.S. ivory sales banned

  • The deadline to submit a proposal for a panel, training or Screening Series session for Netroots Nation 2014 is Wednesday (Feb. 19). The full guidelines and submission form are at www.netrootsnation.org/proposals. The conference is July 17-20 in Detroit.

  • Big Dog gently needles Dubya: Late on Presidents Day, former President Bill Clinton teased his successor, George W. Bush, for not being on Twitter.

Happy #PresidentsDay – to #44 (@BarackObama), #43 (#HowAreYouNotOnTwitter?), #41 (@GeorgeHWBush), & #39. #PresidentialTweeters
— @billclinton


Among the thousands of retweeters was President Barack Obama.

He brought several Zimbabwean models and other women to his hotel room where he took photographs and videos, the newspaper reported. [...]

Reynolds complained that he was not expecting such treatment when he had brought investors to the country, according to the newspaper. He said he had been to Zimbabwe 17 times and had called for U.S. sanctions to be dropped against President Robert Mugabe and his top associates.


This is the latest of several legal problems for Reynolds, an Illinois Democrat, who once was a Rhodes scholar. Reynolds resigned from his congressional seat in 1995 after he was convicted of 12 counts of statutory rape, obstruction of justice and solicitation of child pornography. While in prison he was also convicted of bank and campaign fraud. He was in jail until his sentence was commuted by President Bill Clinton in Jan. 2001.



After his retirement he pursued some of his many hobbies including cooking, carpentry, gardening and sending daily joke emails to family and friends. Perhaps most important to Bill was educating people on the dangers of holding in your farts. Sadly, he was unable to attain his life-long goal of catching his beloved wife Judy “cutting the cheese” or “playing the bum trumpet”—which he likened to a mythical rarity like spotting Bigfoot or a unicorn. He also mastered the art of swearing while being splattered by grease cooking his famous wings. In fact, he wove tapestry of obscenities that still hangs over the Greater Kingston Area


Jimmy Kimmel sent a crew to get reactions to the “news” that Franklin Delano Roosevelt died yesterday. Big surprise: plenty of people wanted to be on teevee despite having no idea what they were talking about.


This unprecedented action is in response to the escalating and highly organized wildlife trafficking crime that threatens the survival of the African elephant, rhinoceros and a host of other species around the world.

“We are seeing record high demand for wildlife products that is having a devastating impact, with species like elephants and rhinos facing the risk of significant decline or even extinction.” said [Secretary of Interior] Sally Jewell. “A commercial ban is a critical element in the President’s strategy to stop illegal wildlife trafficking and to shut down criminal markets that encourage poaching.”



  • Arkansas open carry advocates feel sure a new law endorses their position, but law enforcement disagrees, which is clearly tyranny. Armando on Hillary Clinton and 2016; Obama attacked over expansion of executive power.




Daily Kos



Midday open thread: Bill tweet-teases Dubya, U.S. ivory sales banned

Monday, January 27, 2014

Apple"s iPhone sales lag Wall Street, shares dip

(Reuters) – Apple Inc sold a record number of iPhones over the holiday shopping season but failed to meet Wall Street’s target, reflecting intense competition from arch-foe Samsung Electronics during the crucial period.






Reuters: Top News



Apple"s iPhone sales lag Wall Street, shares dip

Tuesday, January 14, 2014

Nissan lifts U.S. output of electric Leaf as sales rise

Nissan lifts U.S. output of electric Leaf as sales rise
http://s1.reutersmedia.net/resources/r/?m=02&d=20140114&t=2&i=829469881&w=580&fh=&fw=&ll=&pl=&r=CBREA0D1ID300




DETROIT Tue Jan 14, 2014 2:34pm EST



A Nissan Motor logo is seen at the company

A Nissan Motor logo is seen at the company’s global headquarters in Yokohama, south of Tokyo April 7, 2010.


Credit: Reuters/Issei Kato




DETROIT (Reuters) – Nissan Motor Co Ltd (7201.T) has lifted U.S. production of its all-electric Leaf by about 50 percent to 3,000 units a month to meet growing demand for the car, the head of the Japanese automaker’s North American operations said on Tuesday.


Jose Munoz said the Leaf logged record sales of 2,500 units in December and was now the best-selling car in some dealerships in Atlanta, where the government is helping promote the technology, outpacing the Altima sedan.


“This car somehow some years ago was not so appealing in terms of the business for the dealers,” Munoz told a group of reporters at the Detroit auto show. “Now the dealers are very positive, they are making business, they are selling cars.”


The pickup in sales was driven in large part by Nissan’s decision to cut its price by more than $ 6,000 to $ 29,650 at the beginning of last year after a shift in production of the model to the United States allowed it to lower manufacturing costs.


Demand for electric vehicles has generally failed to live up to expectations set when models like the Leaf and General Motors Co’s (GM.N) gasoline-electric hybrid Volt were being developed.


Carlos Ghosn, the CEO of Nissan and its French partner Renault SA (RENA.PA), recently pushed back by two to three years an initial target to sell a combined 1.5 million vehicles by March 2017.


While volumes are still at relatively low levels for a production car — sales more than doubled last year to above 22,000 in the U.S. market — Munoz said momentum was building.


One factor is the increase in charging stations in Atlanta and cities such as Seattle and San Francisco on the West Coast. There are currently 554 quick-charging stations, and more than 15,000 slower “level 2″ public charging stations across the U.S., Nissan estimates.


“In those areas where we have been able to work together with the government to develop the infrastructure is where we are seeing that the vehicle is really selling well,” Munoz said.


The Leaf’s customer base is also evolving. While at first most Leaf buyers were green enthusiasts, increasingly customers focused on the potential cost benefits of owning an electric car are showing up at its dealerships, Munoz said.


As a result, it has recently increased prices on some versions of the Leaf, Munoz said.


Nissan produces the Leaf at its Smyrna, Tennessee plant.


(Reporting by Nathan Layne; editing by Andrew Hay)






Reuters: Business News




Read more about Nissan lifts U.S. output of electric Leaf as sales rise and other interesting subjects concerning Business at TheDailyNewsReport.com

Monday, December 30, 2013

Joke Headline of the Day: "Pending Home Sales Rise"; Five Housing Headwinds

Joke Headline of the Day: "Pending Home Sales Rise"; Five Housing Headwinds
https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj_JXM98EicGnzOz1Il6Mq6CUZhB1cPfqQTajJKoiof2L7c2LkqBPYkFW9w6x7YqkV3FmhpTMRvoTrLY3iaXxVd6c6bH9i8jbr0nbi_p6oFAjwa7jZKsjXUHr90Tq0jI0BFNasWBksbOlo/s400/Pending+Home+Sales.png


I was perusing online stories about today’s release of pending homes sales data from the National Association of Realtors. Here are a few sample headlines.


NAR: Pending Home Sales Edge Up in November
CNBC: US pending home sales rise 0.2 percent
Calculated Risk: Pending Home Sales Index increased 0.2% in November
Forbes: Pending Home Sales Tick Up In November, First Time In Five Months
Reuters: U.S. pending home sales end slide, hint at stabilization
Fox Business News: Pending Home Sales Rise Slightly, Miss Street View


One Headline Title Stood Out


Zero Hedge: Pending Home Sales Plunge At Fastest Pace Since April 2011


It took about one second to understand the discrepancy.


All but the ZeroHedge headline (not necessarily the articles) ignored the NAR statement (see first link) “The Pending Home Sales Index,* a forward-looking indicator based on contract signings, inched up 0.2 percent to 101.7 in November from a downwardly revised 101.5 in October, but is 1.6 percent below November 2012 when it was 103.3.“


ZeroHedge has a chart that shows just that.


Pending Home Sales Year-Over-Year



It’s kind of easy for sales to be up when the previous month was revised lower. But how much lower? The NAR did not even say. Let’s take a look at monthly NAR reports to find out.


November 25 NAR: October Pending Home Sales Down Again, but Expected to Level Out: The Pending Home Sales Index,* a forward-looking indicator based on contract signings, slipped 0.6 percent to 102.1 in October from an upwardly revised 102.7 in September, and is 1.6 percent below October 2012 when it was 103.8. The index is at the lowest level since December 2012 when it was 101.3; the data reflect contracts but not closings.


October 28 NAR: Pending Home Sales Continue Slide in September: The Pending Home Sales Index,* a forward-looking indicator based on contract signings, fell 5.6 percent to 101.6 in September from a downwardly revised 107.6 in August, and is 1.2 percent below September 2012 when it was 102.8. The index is at the lowest level since December 2012 when it was 101.3; the data reflect contracts but not closings.


September 26 NAR: Pending Home Sales Decline in August: The Pending Home Sales Index,* a forward-looking indicator based on contract signings, eased 1.6 percent to 107.7 in August from a downwardly revised 109.4 in July, but remains 5.8 percent above August 2012 when it was 101.8; the data reflect contracts but not closings. Pending sales have been above year-ago levels for the past 28 months.


August 28 NAR: July Pending Home Sales Slip: The Pending Home Sales Index,* a forward-looking indicator based on contract signings, declined 1.3 percent to 109.5 in July from 110.9 in June, but is 6.7 percent above July 2012 when it was 102.6; the data reflect contracts but not closings.  Pending sales have stayed above year-ago levels for the past 27 months.


Note the October data (released November 25) showed the pending home sales index slipped a reported 0.6 percent to 102.1.
  
“Pending Home Sales Rise”


  • Last Month: 102.1

  • This Month: 101.7

  • Result: Rise of 0.2

With all this revisionist history, these month-over-month comparisons seem rather meaningless. The chart posted by ZeroHedge shows the real story.

Lawrence Nun, the NAR cheerleader had this to say “We may have reached a cyclical low because the positive fundamentals of job creation and household formation are likely to foster a fairly stable level of contract activity in 2014“.

Five Housing Headwinds


  1. Prices Up (Housing Less Affordable)

  2. Interest Rates Up (Housing Less Affordable)

  3. Insufficient Wage Growth (Housing Less Affordable)

  4. Household Formation Poor (Lack of Buyers)

  5. Poor Job Growth  (Lack of Buyers)

I suggest there is absolutely nothing that suggests a cyclical low.  The recovery has been fueled by excessively low rates, that are now rising sharply.

For further discussion of headwinds, especially the rise in interest rates, please see Average 30-Year Mortgage Rate Hits 4.47% (Not Counting Fees); Affordability Check


Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com




Mish’s Global Economic Trend Analysis




Read more about Joke Headline of the Day: "Pending Home Sales Rise"; Five Housing Headwinds and other interesting subjects concerning Economy at TheDailyNewsReport.com

Monday, December 2, 2013

VIDEO: News: PS4 is the UK"s Fastest-Selling Console Ever







PS4 gets off to a record-breaking start in the UK. Knack also beats Mario 3D World in the charts.













Thanks for checking us out. Please take a look at the rest of our videos and articles.







To stay in the loop, bookmark our homepage.







VIDEO: News: PS4 is the UK"s Fastest-Selling Console Ever

VIDEO: News: PS4 is the UK"s Fastest-Selling Console Ever







PS4 gets off to a record-breaking start in the UK. Knack also beats Mario 3D World in the charts.













Thanks for checking us out. Please take a look at the rest of our videos and articles.







To stay in the loop, bookmark our homepage.







VIDEO: News: PS4 is the UK"s Fastest-Selling Console Ever

VIDEO: News: PS4 is the UK"s Fastest-Selling Console Ever







PS4 gets off to a record-breaking start in the UK. Knack also beats Mario 3D World in the charts.













Thanks for checking us out. Please take a look at the rest of our videos and articles.







To stay in the loop, bookmark our homepage.







VIDEO: News: PS4 is the UK"s Fastest-Selling Console Ever

Monday, November 25, 2013

Pending home sales hit 10-month low, services sector rebounds


Workers assemble Motorola phones at the Flextronics plant that will be building the new Motorola smart phone ”MotoX” in Fort Worth, Texas September 10, 2013.


Credit: Reuters/Mike Stone




Reuters: Business News



Pending home sales hit 10-month low, services sector rebounds

Wednesday, November 20, 2013

Stocks higher following retail sales increase

Stocks higher following retail sales increase

NEW YORK (AP) — Stocks are higher on Wall Street Wednesday as investors react to a surprisingly big increase in U.S. retail sales last month and better quarterly results from J.C. Penney and other companies.
Business Headlines



Read more about Stocks higher following retail sales increase and other interesting subjects concerning Economy at TheDailyNewsReport.com

Tuesday, October 29, 2013

Sears may separate Lands" End, Auto Center as sales slide

Sears may separate Lands" End, Auto Center as sales slide
http://currenteconomictrendsandnews.com/wp-content/uploads/2013/10/23272__p-89EKCgBk8MZdE.gif






Read more about Sears may separate Lands" End, Auto Center as sales slide and other interesting subjects concerning Business at TheDailyNewsReport.com

Thursday, September 12, 2013

VIDEO: Walmart To Sell IPhone 5C For $79, IPhone 5S For $189







Consumers looking to pick up either of the two new iPhones can save a bit of cash via Walmart. The company announced today that it will sell the 16GB iPhone 5C for $79, $20 off the full retail price, and the 16GB iPhone 5S for $189, a savings of $10 off the full price.













Thanks for checking us out. Please take a look at the rest of our videos and articles.







To stay in the loop, bookmark our homepage.







VIDEO: Walmart To Sell IPhone 5C For $79, IPhone 5S For $189

VIDEO: Walmart To Sell IPhone 5C For $79, IPhone 5S For $189









Consumers looking to pick up either of the two new iPhones can save a bit of cash via Walmart. The company announced today that it will sell the 16GB iPhone 5C for $79, $20 off the full retail price, and the 16GB iPhone 5S for $189, a savings of $10 off the full price.













Thanks for checking us out. Please take a look at the rest of our videos and articles.







To stay in the loop, bookmark our homepage.







VIDEO: Walmart To Sell IPhone 5C For $79, IPhone 5S For $189

Friday, August 30, 2013

Report: Application delivery controller sales up, but WAN optimization slipping


Network World – A report on data center networking equipment says that sales of WAN optimization gear fell in the second quarter, but application
delivery controllers were on the rise.


According to Infonetics Research, which will officially release its full report on Sept. 9, ADC revenues grew by 7% on a quarterly
basis and 4% year-over-year. F5 was the top vendor in the market sector, followed by Citrix and Radware.


[MORE DATA CENTER: Juniper kills MobileNext mobile packet product line]


Infonetics directing analyst for data center and cloud Cliff Grossner said in a statement that IT budgets have helped push
ADC demand higher.


“Previously delayed tier 1 projects are back on track, and enterprise spending in North America is picking up,” he said.


Fellow analyst Matthias Machowinski said that WAN optimization hasn’t seen the same spending growth, thanks in part to a lack
of impetus from the cloud sector.


“So far cloud services have yet to become a demand driver,” he said.


Enterprise Management Associates research vice president Jim Frey says this disconnect also has to do with the way companies
consume these products.


“ADCs are much more closely aligned with specific application projects and budgets, and thus when there are new applications
being rolled out (and there always are) there are new needs for ADCs,” he said in an email to Network World.


By contrast, demands for WAN optimization gear crop up less frequently, Frey added – and there are more alternatives available
these days.


“This is a card that you can only play once in a while,” he said. “Also – there are alternative networking approaches that
reduce the need for traditional WAN optimization, such as using multiple public Internet links to replace fixed/dedicated
WAN links (i.e. Talari, Ecessa) or optimized/shared network services (i.e. Akamai, Aryaka).  Few such options exist for ADCs
– either you use them or you don’t.”


Email Jon Gold at jgold@nww.com and follow him on Twitter at @NWWJonGold.


Read more about lans & wans in Network World’s LANs & WANs section.




Netflash



Report: Application delivery controller sales up, but WAN optimization slipping

Tuesday, August 13, 2013

Japan PM may sweeten sales tax hike with corporate tax cut

TOKYO (Reuters) – Japanese Prime Minister Shinzo Abe may look at cutting corporate taxes to ensure he can push through a planned sales tax increase as he seeks to show he has a strategy to both foster an economic recovery and contain the country’s enormous public debt.


Reuters: Top News



Japan PM may sweeten sales tax hike with corporate tax cut

Monday, August 12, 2013

Japan growth slows in second quarter, adds to sales tax uncertainty




A fishmonger tends to his store in Tokyo August 12, 2013. REUTERS/Issei Kato


1 of 4. A fishmonger tends to his store in Tokyo August 12, 2013.


Credit: Reuters/Issei Kato






TOKYO | Mon Aug 12, 2013 12:11am EDT



TOKYO (Reuters) – Japan’s economy grew at a slower-than-expected rate in the second quarter, offering ammunition to those seeking to delay a scheduled sales tax increase even as government debt has risen past 1,000 trillion yen ($ 10.4 trillion).


Capital expenditure unexpectedly fell for a sixth straight quarter, a sign that companies are yet to boost spending despite the feel-good mood generated by Prime Minister Shinzo Abe’s reflationary policies over the first half of 2013.


The world’s third-largest economy grew an annualized 2.6 percent in April-June, a third straight quarter of expansion but below both a forecast of 3.6 percent growth and a downwardly revised 3.8 percent rate in the first quarter.


“Private consumption came out stronger than expected but capital spending and inventory disappointed,” said Takeshi Minami, chief economist at Norinchukin Research Institute.


“Growth above 2 percent is still considered high, so it wouldn’t lead to a complete postponement of the sales tax hike. But the government could make tax hikes more incremental, without delaying the timing.”


The Nikkei 225 share average fell to a six-week low on the weaker than expected data, with analysts saying confidence was hit by the combination of weak capital spending and the expected sales tax increase affecting consumption.


Abe was elected last December on a platform of aggressive fiscal and monetary stimulus to revive Japan’s economy.


An immediate impact of ‘Abenomics’ was a sharp weakening of the yen, a surge in share prices and exceptionally strong personal consumption in early 2013, but there are questions over his commitment to the third leg – structural reform.


As part of efforts to curb its debt, which is about double the size of its GDP, Japan is due to raise its 5 percent sales tax rate to 8 percent next April and then to 10 percent in October 2015


Public debt exceeded 1 quadrillion yen — or 1,000 trillion yen — for the first time in June, Finance Ministry data shows, highlighting the need for higher taxes or other new revenue.


But the GDP data may weaken the case for the tax hike, and sources have said Abe is worried it may dampen spending and delay Japan’s escape from 15 year of deflation.


“Growth is lower than I expected, so you cannot say that the conditions are appropriate to raise taxes as scheduled,” Etsuro Honda, a professor at Shizuoka University and an influential adviser to Abe, told Reuters.


STRONG SPENDING, WEAK INVESTMENT


On a quarter-to-quarter basis, Japan’s economy grew 0.6 percent in April-June, data released by the Cabinet Office showed on Monday. External demand added 0.2 percentage point to growth, while domestic demand contributed 0.5 point.


Private consumption rose 0.8 percent from the March quarter, more than a median market forecast of a 0.5 percent increase, on robust spending on food, travel and consumer electronics.


But capital expenditure slid 0.1 percent, much weaker than a median market forecast for a 0.7 percent increase and marking the sixth straight quarter of decline.


“The economy has been steadily rising since inauguration of the Abe administration last year,” Abe told reporters.


“I’ll continue to take all possible care about the economy. I’d like to focus on the economy, including implementation of further growth strategies in the autumn.”


Government officials have said the preliminary GDP data and revised figures due on September 9 would be key factors in the tax debate, with a final decision possible by early October.


Critics of the planned two-stage tax hike are calling for a delay or at least a more moderate pace of increase.


Honda has repeatedly said he favors raising the sales tax by 1 percent per year and that he is worried about Japan’s progress in escaping 15 years of mild deflation.


But Bank of Japan Governor Haruhiko Kuroda has said the tax hikes are needed and would not hurt the economy. Kuroda has also said Japan can raise taxes and still escape deflation.


($ 1 = 96.2550 Japanese yen)


(Additional reporting by Tetsushi Kajimoto, Shinichi Saoshiro and Chris Gallagher; Editing by John Mair)





Reuters: Most Read Articles



Japan growth slows in second quarter, adds to sales tax uncertainty