January 1, 2014

New Year’s Message from JAMA

Akio Toyoda, Chairman
Japan Automobile Manufacturers Association, Inc.

On behalf of JAMA and its members, I am pleased to extend our best wishes to all for a happy and fulfilling 2014.

In Japan, 2013 will likely be remembered as the year in which the Japanese economy stood at the starting line on the path to recovery from a number of setbacks, including the 2008 global financial crisis.  Private-sector efforts to surmount these setbacks, including damage incurred by the March 2011 earthquake and tsunami and excessive yen appreciation, were buoyed by the “Abenomics” stimulus and other measures introduced by the Japanese government over the past year.

The selection of Tokyo to host the 2020 Olympic and Paralympic games has also helped fuel the hopes and dreams of the Japanese people.

Nevertheless, scars from the twin disasters of March 11, 2011 are still in clear evidence, with reconstruction remaining a work in progress and numerous victims still unable to return to their homes and livelihoods.  I hope that the new year will see redoubled efforts resulting in significant further headway in this regard.

Positive trends were present in the global automobile market in 2013, including continued robustness for the U.S. market and highly welcome stirrings of recovery in Europe.  Less encouraging was the perceived slowdown in emerging markets, where the outlook for 2014 is unpredictable at best.

In Japan’s domestic market, while results for the first half of last year finished below the level of the same period in the previous year, the second half produced signs of recovery on the strength of improved consumer confidence, among other developments.  However, because this upturn also reflected last-minute demand prior to the hike in the national consumption tax scheduled for this April, it is difficult to be optimistic about domestic market trends in the months to come.

More generally, 2014 is shaping up to be a critical year for the Japanese economy in transitioning from mild recovery to sustained growth, for a strong start towards the milestone year of 2020 and beyond.  Our industry being a mainstay of the domestic economy, we are determined to do our best to help restore resilience and smiles in Japan.

Key priorities for JAMA this year are threefold: revitalizing the home market; improving the business environment; and creating safer, more comfortable and sustainable mobility.

Revitalizing the domestic market:
The Japanese automotive industry’s competitive strength is founded on excellence in manufacturing.  Sustaining that foundation by halting the two-decades-long stagnation in Japan’s domestic auto market prompted our industry to pursue various efforts over the past year targeting the latter goal.

One such effort was last autumn’s “Top Managers Discuss the Charisma of Cars” program, involving visits by top executives from JAMA member companies to university campuses to engage in direct dialogues with students.  This initiative had encouraging results, including numerous requests for information from the students about automobiles and their evident enjoyment in pursuing hands-on examinations of display vehicles and their interiors.  Coming away from some of these events convinced that the widely-held idea that young people are losing interest in cars is by no means the case, I felt inspired anew to build cars that will earn their attention and respect.

At the 43rd Tokyo Motor Show held in November last year, Japanese and overseas automakers energetically introduced numerous new models including 76 world premieres, underscoring the show’s status as a high-profile event on the global automotive calendar.  Held simultaneously and in close proximity to the Tokyo Motor Show’s Big Sight venue was the Odaiba Motor Festival, a novel concept which allowed participants to interact directly with cars and motorcycles.  Visitors to these two events thus enjoyed a kind of “hybrid” experience: on one hand, the experience of viewing the latest automotive breakthroughs at the motor show, and, on the other, that of actually driving a car or riding a motorcycle at the festival.     

Another innovation was the “Mobilityscape Tokyo” media event on the eve of the Tokyo Motor Show, featuring successive groups of five top executives from the Japanese auto industry discussing, among other topics, “the DNA of Japanese manufacturing.”  Mobilityscape Tokyo also saw the unveiling of the Last Pine Tree of Hope sheet-metal sculpture, representing the lone pine tree that “miraculously” survived the March 11, 2011 natural disasters that devastated northeastern Japan.  Heavily attended by the overseas media as well, the event conveyed, I believe, a clear sense of the powerful potential energy inherent in Japanese manufacturing.

This panoply of exhibits and events attracted 902,800 visitors to the 2013 Tokyo Motor Show, a significant increase from the previous show’s tally of 840,000 attendees, which attested to the public’s growing interest in the auto industry and its products.

Although the next Tokyo Motor Show is scheduled for 2015, JAMA members will, in the interim and in a spectrum of formats, be vigorously building on last autumn’s success in communicating the appeal of cars and motorcycles to a responsive public.

Key to the revitalization of the domestic auto market, however, is a reduced tax burden on vehicle owners.  The government’s large package of tax revisions announced at the end of last year included, among other auto tax-related measures, reductions in the automobile acquisition tax, effective from the time the consumption tax is raised to 8%, as well as further tax breaks for designated categories of eco-friendly vehicles.  We are grateful for the hard work of all those involved in the formulation of these revisions and will continue to introduce products that, because of their appeal, will help revive the market.

On the other hand, we find it regrettable that the decision was also taken to raise taxes on motorcycles and mini-vehicles, although in the latter case the scope of the vehicles targeted for tax increases will be limited.  Meanwhile, we will continue to lobby for the total abolition of the acquisition tax, effective from the time the consumption tax is raised, in a second step, to 10%, and for the concurrent implementation of an automotive environmental performance tax incentive system that will genuinely lower the tax burden on vehicle owners.

Improving the business environment:
Another factor critical to sustaining manufacturing activity in Japan is a sound domestic business environment.  To date, our industry has lobbied for positive action by the government to address a range of related issues.  Since Prime Minister Shinzo Abe’s administration assumed office in late 2012, bold government policies have successfully addressed the priority issue of excessive yen appreciation, and we are deeply appreciative of the steps taken in that regard.

However, outstanding issues remain.  Our industry will continue to press the government on, among other matters, the need to expedite the conclusion of free-trade agreements, lower the corporate tax rate, and secure a safe and stable supply of reasonably-priced electric power.

Creating safe, comfortable and sustainable mobility:
The Japanese automobile industry, like Japanese society, is also being impacted by a rapidly aging population, by challenges in the area of energy security, and by environmental issues.

JAMA and its members deploy an array of initiatives to support the government’s goal of making road transport in Japan the world’s safest.  As Japanese society steadily turns grayer, we intend to advance road-to-vehicle and vehicle-to-vehicle technologies to enable, for example, the wider application of automatic driving features and other safety-related breakthroughs, in order to achieve greater safety for all road users including the elderly, who constitute a disproportionate number of road accident victims.

With respect to energy conservation and environmental protection, JAMA members are continuously advancing the development and commercialization of electric, plug-in hybrid, fuel cell, clean diesel and other so-called next-generation vehicles.  Expanding the market for EVs and FCVs requires the development of the requisite recharging infrastructure, and to that end JAMA members will be partnering with the industries concerned, in the transition to sustainable mobility.

To promote Japanese technology’s global lead in these and other new fields, our industry will not only advance technological innovation but also position solutions to these social issues at the core of our growth strategies, as well as engage in pertinent partnerships with government and academia on a nationwide scale.  At the same time, we will continue to petition the government for the systematic implementation of its own growth strategies aimed at making Japan the global center of innovation.

In conclusion
The awarding of the 2020 Olympic and Paralympic Games to Tokyo offers Japan a rare opportunity to showcase its strong points to the world.  We believe that the country will seize this opportunity to map out a bright future that will help make events in 2020 a momentous success.  For the Japanese automobile industry, 2020 is also a pivotal delivery date, and in the lead-up to it we will spare no effort in working to achieve cutting-edge motorization that will redefine the future of mobility.

In that spirit, JAMA and its members look forward to your continued support throughout 2014.