Auto-related corporate failures rise 50%

Bankruptcies by auto-related firms in Japan soared more than 50 percent in the first half of this year, compared with the same period of last year.

Private research firm Teikoku Databank says 273 auto-related companies went under between January and June this year, with debts of more than 10 million yen, or 104,000 dollars. The figure is up 50.8 percent from a year earlier.

By industry, failures of new and used car dealers, and auto parts wholesalers and retailers rose 19 percent.

There was an 11 percent increase in bankruptcies in the auto service industry such as maintenance and repair.

Auto parts manufacturers saw 3.4 times more failures.

Bankruptcies surged as slumping auto sales from the global recession led major auto companies to heavily cut production.

More large firms have become casualties of the global downtown.

71 companies went bankrupt with more than 5.2 million dollars in losses. The number quadrupled from a year earlier.

The research firm says that production cuts are easing at major carmakers, thanks to government tax incentives for eco-friendly cars. But as full recovery in demand is still not in sight, more corporate failures are likely.