January 1 , 2006
New Year’s Message
Fujio Cho, Chairman
Greetings and best wishes to all for 2006
Although the first half of 2005 saw a moderate slowdown in Japan’s economic recovery owing primarily to yen appreciation and surging crude oil prices, around mid-year improvements in the employment/income environment and robust corporate earnings helped fuel personal consumption, capital investment and other spending, generating a growing optimism in regard to the economy.
Sustained by new model launches, domestic demand for passenger cars and commercial vehicles totalled 5.85 million units, registering no change from 2004. Motorcycle sales in 2005 rose 0.7% over the previous year to 739,000 units, for the first such gain in this category in three years.
Despite uncertainties with respect to crude oil prices and currency rates, forecasts for 2006 anticipate sustained growth for the global economy, focusing on the United States and Asia, and positive economic trends in Japan based on the employment and income situations among other factors. Accordingly, motor vehicle demand in 2006 should total 5.93 million passenger cars and CVs and 730,000 motorcycles.
With Japan’s domestic motor vehicle market maintaining in recent years a per-annum level of just under 6 million units, it has been concluded that automobiles represent a mature industry. But the broader picture shows the sector in fact charting growth in major markets such as the U.S. and Europe, as well as in rapidly motorizing regions such as Southeast Asia and the “BRIC” nations (Brazil, Russia, India and China). The overseas output of Japanese manufacturers has meanwhile reached the 10 million-unit mark. From a global perspective, therefore, automobiles are clearly a growth industry.
Against this backdrop, and in order to maintain its leading position in global competitiveness, it is essential that the Japanese auto industry forge a solid foundation facilitating, for its own domestic market which is said to be the world’s most exigent, the further enhancement of its technological strengths, while maintaining the rigorously high standards of Japanese craftsmanship. Towards that end, achieving an annual domestic demand level of 10 million units will, from the industry’s perspective, be critical.
Meeting the highest standards of craftsmanship is a constant priority for Japan’s automobile manufacturers, and in 2006 they will continue to supply products of outstanding quality and appeal in all respects, including the key areas of safety and environmental responsibility.
Japanese automakers are firmly committed to achieving lower emissions in the vehicles they produce and are making continuous progress in this respect, in addition to advancing the development of clean-energy vehicles. Success in this area is measurable: Transport CO2 emissions in Japan have declined for two consecutive years, a result also of logistical improvements introduced throughout the sector.
The automakers intend to remain in the vanguard of technological innovation to further increase automotive fuel efficiency, and are proactive participants in discussions in Japan on the introduction of new fuel economy regulations. In the interest of greater environmental-friendliness overall, this stance similarly extends to their efforts with respect to the development and wider diffusion of clean-energy vehicles including fuel-cell cars, and to low-emission diesel vehicles.
Japan’s automobile recycling system, launched in January 2005, is operating smoothly thanks to the efforts and support of all relevant industry players. Auto manufacturers are meanwhile working with the Japan Automobile Recycling Promotion Center to develop vehicles with improved recyclability.
Road fatalities in Japan have been steadily declining for a number of years, but road accidents are on the rise. JAMA has pledged to support the government’s target of halving the number of road fatalities over a 10-year period (2003-2013) and will carry out longstanding and new road-safety promotional activities as well as encourage expanded use of vehicle safety equipment and the commercialization of Advanced Safety Vehicle (ASV) technology.
With its global operations, the Japanese auto industry actively seeks the introduction of critical improvements in the international business environment including the establishment of common rules for investment and trade. JAMA strongly supports the multilateral trade pacts being pursued by WTO and also advocates the promotion of economic partnership agreements to complement those pacts.
As globalization within the automobile industry expands worldwide, more and more shared issues are being addressed on a common basis: global harmonization of automotive technical regulations, countermeasures to global warming through improved fuel quality, more effective tailpipe emissions-reduction technology, improved safety, and the protection of intellectual property rights, among others. To contribute to greater mutual understanding and meaningful progress in these areas, JAMA will continue in 2006 to participate in global auto industry meetings and to appeal to national governments on these issues.
Japan’s automobile tax regime is complex and extremely onerous for vehicle owners. JAMA has for many years advocated and actively lobbied for a streamlining and easing of the automotive tax burden. One regrettable development on this front in 2005 was the formulation of a national policy that would take a portion of all of the tax revenue from vehicle owners which has traditionally been earmarked exclusively for road network improvements—and which, moreover, is currently higher than usual owing to the imposition of a provisional tax rate that is double the standard rate—and reallocate it to general revenue. JAMA believes that any portion of such tax revenue not actually spent on road improvements should be returned to the taxpayers, and considers this decision not only unacceptable in principle, but also in blatant disregard of the needs and wishes of vehicle users.
JAMA will therefore continue to lobby vigorously on behalf of motor vehicle owners for a more equitable and satisfactory national automotive taxation scheme.
The 39th Tokyo Motor Show in autumn last year was a gala automotive event attended by some 1.5 million visitors. The show will be held next in 2007 as an “integrated” exhibit covering heavy-duty commercial vehicles as well as passenger cars, light CVs, and motorcycles—the first among the world’s major auto shows to take this step. With a more than 50-year history behind it, the 40th Tokyo Motor Show promises to be a compact, informative display, and JAMA is already preparing for it.
Throughout its broad-ranging activities, JAMA’s primary concern is to serve the needs and interests of vehicle users and the public at large, and thereby to make significant contributions to society in the years ahead. This is and will remain our guiding principle, and my thanks go out to all of you for your continued support in this new year of hope and opportunity.
