Automakers sold 279,389 cars in Japan last month, down 37 percent — the biggest ever year-on-year drop for March, the Japan Automobile Dealers Association said.
The plunge in sales stems from weak consumer sentiment following the March 11 earthquake and tsunami, which decimated much of northeastern Japan, and the ensuing radiation leaks at the coastal Fukushima nuclear power plant.
"People are simply reluctant to buy cars at this time. The tsunami and the ongoing nuclear disaster have depressed consumer sentiment," said association spokesman Masashi Miyajima.
Miyajima said many people in the quake-hit areas were also canceling car purchases.
The tsunami caused massive disruptions in the supply of auto parts, forcing Toyota Motor Corp. and others to suspend production.
JPMorgan said auto output will take time to completely bounce back because of the "breadth of the production chain" that has been affected.
But once normal production returns, auto sales should climb, "especially as the loss of automobiles in affected areas was massive," JPMorgan economist Miwako Nakamura said in a report for clients.
March was the seventh straight month of decline for Japan's auto sales. Before the disaster, sales were falling because of an end to government incentives for purchases of fuel efficient cars.
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