JAMA Comment on the Outcome of Japan’s 25th Upper House Election
Akio Toyoda, Chairman, Japan Automobile Manufacturers Association, Inc.
The Japan Automobile Manufacturers Association, Inc. (JAMA) views the outcome of today’s Upper House election as an indication of voters’ evaluations of the “Abenomics” stimulus policies first introduced by the administration of Prime Minister Shinzo Abe six-and-a-half years ago, as well as an expression of expectations for policies going forward. For its part, the Japanese automobile industry is very encouraged by this outcome and, with the stability gained thereby, would like to see the administration and ruling parties make strong efforts to achieve further economic growth and diplomacy-driven improvements in the free trade environment.
The Heisei era (1989-2019) saw a steady decline in domestic demand for automobiles, to the point where such demand is now more than 30% lower than in the early Heisei years. At that time, JAMA member companies’ unconsolidated sales collectively totalled, in value terms, roughly 24 trillion yen while their consolidated sales (i.e., including those of Japan-based subsidiaries and overseas affiliates) reached approximately 30 trillion yen, with domestic sales alone accounting for about 80% of total sales. Also during the last thirty years, overseas production—in numbers of units—grew to exceed domestic production and consolidated sales rose significantly as a result, to approximately 75 trillion yen in fiscal year 2018 ending March 31, 2019. Unconsolidated sales, however, did not keep pace and by the end of fiscal 2018 were about 60% lower, in value terms, than in the first years of Heisei. JAMA member manufacturers have worked strenuously and resolutely to protect manufacturing in Japan while expanding their overseas operations. Nevertheless, confronted with the realities of the home market over the past three decades, we were not able to maintain our domestic employment levels, which consequently declined. JAMA member companies have a sense of crisis that it will become more difficult for the Japanese automobile industry to protect domestic employment if the domestic market and domestic production continue to shrink in the face of uncertain prospects with regard to, for example, the recent appreciation of the yen and the trade environment.
In this once-in-a-century period of major transition for the worldwide motor vehicle industry, the Japanese auto industry continues to work vigorously and with unflagging determination to safeguard manufacturing and employment in Japan. JAMA member companies aim to bolster road safety and environmental protection in road transport as well as contribute to a greater sense of well-being in Japan by proactively pursuing employment protection, responsibility with respect to corporate tax obligations, and the achievement of new mobility through innovative technology. We hope that the administration and ruling parties will understand our perspective and promote growth strategies that will support us in our efforts.