January 1, 2003
New Year's Message
Yoshihide Munekuni, Chairman
My best wishes to all for a happy and prosperous New Year.
I will begin with a brief review of the Japanese economy and auto industry during the past year. A deflationary trend intensified amid an ongoing slump in consumer spending and corporate investment in plants and equipment, resulting in prospects for the future that are far from clear. Various government initiatives aimed at economic recovery, including the reform of special public corporations, restructuring of the economy, and a comprehensive package of deflation-fighting measures, did, however, bring some hope.
Against this backdrop, domestic demand for passenger cars and commercial vehicles in 2002 totalled 5.81 million units, a modest 1.6% decline from the previous year. Exports reached 4.49 million units, an increase of 7.7 percent, centered on firm exports to the North American market and to the growing Asian market, particularly China, where economic development has been remarkable. Domestic production totalled 10.25 million units, up 4.8 percent from 2001, bringing it back over the 10 million mark for the first time in two years. Motorcycles registered domestic sales of 810,000 units, up 2%, with exports at 1.42 million units, down 10% on the year, and domestic production totalling 2.06 million units, down 11.3%. (Note that these figures are estimates as of the end of November 2002.)
In 2003 the prospects for the U. S. economy are uncertain, while consumer spending and corporate plant-and-equipment investment in Japan may remain weak. Despite this cloudy outlook, Japan's economy could transition from its current low level of activity into positive growth as a result of the government's launch of a supplemental budget and further monetary easing. Our forecast is that domestic demand will reach 5.85 million units for passenger cars and CVs and 821,000 units for motorcycles.
Japan's economy and its automobile industry clearly face a challenging situation. Auto manufacturing is an integrated industry that supports a large number of related industries, ranging from distribution and materials supply to infrastructure, and it therefore plays a critical role in the national economy and in employment. This being so, the industry must remain vigorous by aggressively coming to grips with the many issues confronting it in order to spearhead economic recovery in Japan. The path to those goals lies in the industry's continued pursuit of sustainable development.
In addressing the issues, automakers must determine just what will be of greatest benefit to vehicle users. Taking into account consumer viewpoints, they should set high targets for themselves and engage in friendly competition to reach those targets. The most pressing priority is to contribute to the welfare of society now and for generations to come through technological advances in the areas of vehicle safety and environmental impact.
In support of the environment, automakers will aim for even greater fuel economy and reduced emissions in their products; maintain the operation of effective CFC recovery systems; and broaden model ranges to promote the greater diffusion of fuel-cell and other clean-energy vehicles. At the same time the industry must work hand-in-hand with government and related industries to improve fuel quality and traffic flow. Diesel emissions are of particular concern. Automakers are accelerating their efforts to launch new vehicle technologies and models to comply not only with the stricter diesel emission regulations to be enforced nationwide this year, but also with the environmental ordinances of the city of Tokyo. The auto industry is also working actively with government agencies and related organizations to ensure that all the necessary infrastructural and systems groundwork is laid for optimal implementation of Japan's Automobile Recycling Law that will go into effect in January, 2005.
With respect to safety, automakers continuously strive to improve vehicle safety by taking full advantage of ITS (Intelligent Transport Systems) and ASV (Advanced Safety Vehicle) technologies, while at the same time supporting comprehensive programs to enhance the public's awareness of traffic safety issues.
Automobiles being international products, automakers continue to expand the globalization of their operations so as to be able to respond more effectively to local market requirements. They are working also to benefit consumers worldwide by playing an active role in the formulation of rules on trade and investment, through the World Trade Organization and bilateral arrangements such as free-trade areas, and by contributing directly to efforts aimed at the international harmonization of technical regulations and vehicle certification requirements. A case in point is China, whose membership in WTO is paving the way for its domestic application of related rules and regulations, as a result of which China's business environment is expected to change radically for the better. JAMA is acting to build a constructive relationship with China by moving to establish an office there.
In the same vein, a second Global Automotive Industry Meeting will be held during the run of the Tokyo Motor Show this autumn. Following up on its inaugural session last year, the Global Meeting will bring together the senior executives of automakers in Japan, the U.S. and Europe to promote exchanges and increased mutual understanding among auto industry organizations and governments worldwide.
Automakers also want to enhance the overall rewards of vehicle ownership. Domestic car users are at present saddled with a complex and excessively burdensome set of automobile taxes. In response, the industry is proposing changes to the tax system to simplify it and ensure that it is fair, environmentally responsible and more in line with international norms. It is also acting energetically to research and propose improvements to roadways and other aspects of the transportation environment; to promote a greater use of "barrier-free mobility" vehicles for the elderly and disabled; to encourage more widespread operation of ETC (electronic toll collection) systems; and to bolster automobile anti-theft measures. In addition, automakers are working jointly with the government and industry partners to facilitate the introduction of "one-stop" services for vehicle ownership-related procedures, which are now under examination.
The 37th Tokyo Motor Show for Passenger Cars taking place this autumn will emphasize the theme of meeting challenges and making changes now in order for the automotive industry and its products to make significant strides into the future. In parallel with preparations for the Show, a wide range of information will be disseminated through print media, the Show's Web site and JAMA's Automotive Llibrary throughout 2003, as part of an effort to promote a better understanding of automobiles and the industry that produces them.
The merger of JAMA, the Japan Motor Industrial Federation and the Japan Automobile Industry Employers' Association in May 2002 marked a fresh start for JAMA and will considerably facilitate our carrying out expanded business activities. As we work in closer collaboration with our members to ensure faster decision-making and more efficient and transparent operations, we look forward to the continued support and encouragement of our friends and colleagues.
