Despite the faltering economy, domestic demand in the auto market is likely to increase by 7 percent in the 1998 business year over the current business year to March 31, the Japan Automobile Manufacturers Association announced March 19.

According to JAMA's estimates, sales of passenger cars, trucks and buses in the next business year are likely to increase to 6.77 million units with the help of a series of economic stimulus measures.

The estimate seems rather optimistic, but JAMA Chairman Yoshifumi Tsuji said that auto sales are unlikely to further drop in the 1998 business year considering the already low level of domestic demand in the current year.

With the government's economic stimulus measures already announced this year, the nation's economy will gradually recover toward the latter half of the next business year, he said.

According to JAMA's report, auto sales in the current business year will drop 13.1 percent to 6.33 million units, reflecting auto-market sluggishness that has continued since the consumption tax hike last April. At the regular news conference, Tsuji also announced that he will serve as JAMA chairman for another two-year term after his current term expires in May. "I told the board of directors that I would like to serve as chairman for another term, and I received their approval March 20," he said.

The chief reason, according to Tsuji, is his concurrent post as chairman of the Committee on Environment and Safety at the Japan Federation of Economic Organizations (Keidanren), Japan's most influential business organization. "To tackle the issue of carbon dioxide emissions, the transport industry is key. ... If I continue to serve as chairman of the two organizations, it would be better for discussing the overall environment issue," he said.