New vehicle sales in Japan, excluding minivehicles, fell 27.6% year on year last month to 241,472 units, decreasing for the 11th consecutive month, the Japan Automobile Dealers Association (JAMA) said.

Although component shortages following the earthquake and tsunami in March are recovering, the fall reflects the ending of government subsidies for environmentally friendly car purchases which were in play last July.

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The drop last month, however, was still the biggest year on year decline since 1968, when record-keeping began, and followed a 23.3% drop in June.

JAMA reported that dealers sold 215,265 passenger cars, down 30%, while trucks rose 1.4% to 25,281 and buses fell 14.7% to 926. New minivehicle sales for July fell 14.1% to 131,586 units.

Toyota fell 37% to 101,790 units while Honda, Mitsubishi and Fuji Heavy Industries [Subaru] saw sales of their fall by over 30%.

JAMA general manager Michiro Saito said: “Looking at the trend from April onwards, the situation hasn’t changed much from June. Vehicle supply won’t return right away and we’re looking forward to the production recovery at automakers from around September.”

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Meanwhile, Hyundai and Kia have seen their sales accelerate in the past few months as diaster-hit Japanese rivals suffered from a shortage of components.

Hyundai and Kia have outperformed even during the global financial crisis and are expected to post robust sales and earnings in the second half although they will face intensifying competition from reviving Japanese carmakers and a strengthening won.