May 21, 2009
JAMA's Fiscal 2009 Business Activity Plan
Mobilizing Resources to Help Pave the Way to Recovery
Fiscal year 2009 (ending March 31, 2010) will most likely see a continued deterioration in economic conditions worldwide as a result of the global financial crisis. The situation in Japan will be no exception to this trend.
On the one hand, against a backdrop of increasing concern with the issue of environmental sustainability, domestic vehicle demand in fiscal 2009 should be positively impacted by government measures to reduce (or exempt, in the case of alternative-energy vehicles) the automobile acquisition tax and tonnage tax on new vehicles meeting stipulated environmental performance criteria. On the other hand, however, with the economic downturn's consequent plunge in consumer confidence, vehicle sales are projected to be lower than in 2008.
Furthermore, as a result of the global retreat in demand, exports also are expected to fall below the previous year's level.
Motorcycle demand in Japan has been bolstered in recent years by the introduction of a new automatic-transmission motorcycle license category, the repeal of the ban on expressway tandem riding, and the introduction of electronic toll collection (ETC) for two-wheelers. Japan's shrinking youth demographic and ongoing decline in the number of new moped licensees will, however, continue to adversely affect the market, which should also see a drop in sales compared to 2008.
In short, domestic market conditions for the Japanese automobile industry are the toughest it has faced in its history, putting manufacturers and suppliers to a test of unprecedented severity. Nevertheless, the industry is determined to harness the full range of its resources in order to weather these profoundly challenging times and—the challenges notwithstanding—fulfill all aspects of the key role it plays in Japan's economy and in Japanese society.
Today's harsh economic conditions underline the need for sustained and increasingly focused strategies over the long run. Accordingly, this year JAMA will intensify its efforts in the priority areas of (1) sustainability in road transport, in terms of both safety and environmental protection; (2) greater mutual understanding and cooperation at the international level; and (3) greater enjoyment and convenience in vehicle use. Recovery of the industry will, in the process, be JAMA's ultimate goal.
1. Promoting Greater Safety and Environmental Protection in Road Transport
In the pursuit of greater road safety, and in line with the Japanese government's goal of making Japan's roads “the safest in the world,” JAMA will be promoting not only the further advancement of vehicle-based active and passive safety technologies for collision avoidance and injury mitigation, but also, through its regular information campaigns and safe-driving programs, increased public awareness of road safety issues and solutions.
As regards environmental sustainability, JAMA and its member companies will continue to treat the fight against global warming as the single most urgent priority on this front.
Beyond the efforts being made to ensure that Japan's 2010 road transport CO2 reduction goal (as established under the Kyoto Protocol-compliant national target) is met, the Japanese automobile industry is also working to help accelerate the shift to a low-carbon society. Efforts in this area include advancing the development of fuel efficiency-enhancing automotive technologies and next-generation alternative-energy vehicles; lobbying for road infrastructure measures enabling smoother road traffic flow; and the promotion of ecodriving among all vehicle users.
With respect to reducing CO2 in the manufacturing process, an agreement was reached last year between JAMA and the Japan Auto-Body Industries Association (JABIA) on a stringent, independently established target for production-plant emissions reduction on a joint basis. Reductions will therefore continue to be made this year in line with that target.
The auto industry is also participating, on a voluntary basis, in the Japanese government's trial launch of an integrated domestic market for emissions trading. JAMA and JABIA member manufacturers (14 and 44, respectively) have joined forces to support this initiative through the newly established Global Warming Countermeasures in Automobile Production Consultation Group.
2. Promoting Greater Mutual Understanding and Cooperation at the International Level
The fact that Japanese automakers conduct business operations in countries around the world underscores the critical importance of promoting progress in trade liberalization and further improvements in the international business environment.
JAMA therefore looks forward to the successful conclusion of the World Trade Organization's Doha Round of multilateral trade negotiations, and likewise supports the establishment of bilateral economic partnership agreements between countries or regions.
Additional issues related to auto industry globalization and of growing international concern include intellectual property protection and the double taxation to which companies are subject under transfer pricing taxation by overseas authorities.
In 2009 JAMA will continue its proactive involvement with these and other issues of global scope by working directly with industry counterparts and national authorities worldwide, on the basis of coordinated efforts with the Japanese government.
3. Promoting Greater Enjoyment and Convenience in Vehicle Use
Not only do Japanese automakers aim to supply products that address the diverse needs of vehicle users, they also continuously seek to enhance the comfort, convenience and enjoyment of automobiles and motorcycles.
Preparations for the 41st Tokyo Motor Show to be held this autumn are now well under way, and distinguished by meticulous consideration for the difficult situation now facing the automobile industry worldwide. The organizers have a double focus, the first being the status of the show itself and their objective of staging an event that is both highly informative in content and attractive to visitors. Their second focus is to determine the scope of activities to be held in the years when the Tokyo Motor Show—a biennial event, held in uneven years—does not take place.
The auto industry meanwhile remains keenly aware of the need to further improve the vehicle use environment in Japan, as reflected in its multi-pronged efforts to maximize satisfaction with vehicle ownership and the driving and riding experience.
As announced in late 2008, Japan's tax regime has been revised to incorporate new provisions for reducing (or exempting, in the case of alternative-energy vehicles) the acquisition and tonnage taxes on low-carbon vehicles. This very positive initiative should lead to the more widespread use in Japan of vehicles with advanced environmental performance and, combined with the vehicle purchasing incentives outlined below, help accelerate the shift to low-carbon road transport. JAMA is making every possible effort to heighten the impact of these groundbreaking measures.
The aforementioned purchasing incentives are a feature of the government's supplemental economic stimulus package for fiscal 2009 and also target vehicles with advanced environmental performance. Along with the vehicle tax reduction/exemption provisions described above, these measures should serve to boost domestic demand for automobiles and thus hasten the recovery of Japan's stagnant vehicle market, in addition to promoting more environmentally-friendly road transport.
JAMA has a longstanding record of making formal requests to the government to reduce as well as restructure Japan's numerous auto-related taxes. While the new provisions outlined here are therefore highly welcome, JAMA will nevertheless continue to call for comprehensive auto tax reform in order to lighten the heavy financial burden those taxes pose on vehicle owners.
JAMA also intends to continue pressing for the further integration of Intelligent Transport Systems (ITS) into Japan's road infrastructure; continued upgrading of the road transport environment; greater availability of motorcycle parking bays in urban areas; safer roadside conditions, against the backdrop of a rapidly aging population; and expanded development and use of more advanced, user-friendly assisted-mobility vehicles.
Revitalizing the Automobile Industry amidst the Global Recession
The automobile industry is at present confronting an economic environment that has, in a short period of time, deteriorated at an extremely swift pace, with no clear signs of recovery in sight in the first quarter of fiscal 2009.
As a result, there is, in addition to the activities outlined above, an urgent need to promote measures in Japan that are more immediately effective in halting the slump in the vehicle market and alleviating the current crisis conditions with which businesses are generally faced. Recovery in the automotive sector will help boost recovery in the Japanese economy at large.
For JAMA, the coming year will therefore be marked by an intensified commitment to strengthen communication and collaboration with key government and industry entities, while making optimal use of its experience and expertise to firmly address these exceptionally challenging times.
