Domestic automobile sales for 1998 are now projected to drop 12.3 percent from last year to 5.9 million units, slipping below the 6 million level for the first time in 12 years, an industry group said on Thursday.

For 1999, however, Yoshifumi Tsuji, chairman of both the Japan Automobile Manufacturers Association and Nissan Motor Co., said that the association expects domestic sales to increase 2.5 percent from 1998 to 6,050,000 units.

But association officials said that the figure still indicates a severe situation for auto makers. The projected sales for 1999 only equal 90 percent of the 1997 level. "I don't think there will be many positive factors (to boost sales) in 1999," Tsuji said, adding that a significant sales increase will be achieved only in the latter half of 1999.

Commercial-use automobiles have particularly suffered sharp sales drops in 1998 amid the serious economic slump. Sales of large-size trucks plunged nearly 40 percent from the previous year to 105,000 units.

The minicar category is the only one that enjoyed an increase in 1998, with a sales rise of 0.9 percent from the previous year. But Tsuji pointed out that it was achieved only through the rush release of new models in October in accordance with the implementation of new size regulations, noting "it is only natural" to see an increase in sales.