January 1, 2009
New Year’s Message
Satoshi Aoki, Chairman
As this new year of hope and challenge begins, and on behalf of the Japan Automobile Manufacturers Association and all its member companies, best wishes to all for a happy 2009.
The earlier part of the past year was marked by continuous steep increases in the prices of crude oil and raw materials, while the latter half of the year saw the global economic slowdown, spawned by the financial crisis in the United States, slide into a major downturn. Japan’s economy has not been spared, as we have seen with the swift rise in the value of the yen, sinking stock prices and other developments which are making the situation even more critical.
Against that troubling backdrop, Japan’s total domestic demand for passenger cars and commercial vehicles in 2008 is estimated at 5.11 million units, down 4.5% from 2007 for the fourth successive year of decline. Motorcycle demand is expected to fall for the third straight year, down to 570,000 units for a decline of 21.1% compared to 2007. These figures underscore the challenges facing Japan’s vehicle market.
On the other hand, positive factors in 2008 included the growing demand for automobiles in emerging economies and elsewhere, as well as an expanding market for the outstanding environmental performance of Japanese-brand vehicles. As a result, production figures in Japan as well as for Japanese automakers operating overseas both surpassed the 10 million-unit level. However, the deteriorating global economy in the latter half of 2008 translated into a rapid and steep drop in vehicle demand, and consequently a major decline in production in the closing months of the year.
As we enter 2009, there are unfortunately no prospects for any imminent recovery in the world economy. Instead, we are facing a financial crisis that threatens to be protracted, and witnessing not just a further downswing in global business activity, but also falling stock prices, stagnant consumer spending, a sustained risk of significant currency fluctuations, and other adverse conditions. As a result, the business environment will doubtless remain severe for some time.
Taking all these factors into account, JAMA projects domestic passenger car and commercial vehicle demand in 2009 at 4.86 million units, and motorcycle demand at the 500,000-unit level.
Automobile manufacturing is a core sector of the Japanese economy and the backbone of a broad range of supporting industries. As such, our industry shoulders considerable responsibility in terms of helping to sustain economic health and the welfare of communities across the land. With the economic climate now changing at a speed and on a scale never before experienced by the Japanese automobile industry, the many challenges we face demand prompt and sweeping revisions in direction, with the very survival of business operations at stake.
This year, we will therefore continue to work closely with government, industry partners and other major stakeholders, as we marshal our resources and adopt innovative, strategically prioritized approaches to the challenges at hand, aiming to emerge from the current difficulties even stronger than before. Our efforts will focus primarily on the following three areas.
Achieving Greater Safety and Environmental Protection in Road Transport
- With regard both to active safety (collision avoidance) and passive safety (injury mitigation), Japan’s automakers will continue to advance the development and application of in-vehicle safety technologies, while at the same time promoting increased awareness of road safety through public information campaigns, safe-driving programs, and the development and diffusion of pertinent educational materials. Through this two-pronged approach to road safety promotion, the automakers hope that measurable progress will be achieved towards the government’s goal of making Japan’s roads the safest in the world.
- With respect to the environment, the most urgent issue for JAMA and its member companies is climate change. Accordingly, continued intensive efforts will be made focusing on CO2 emissions reduction in road transport to help counter global warming—not only in terms of Kyoto Protocol target compliance, but in a post-Kyoto framework as well. These wide-ranging efforts will include increasing vehicle fuel efficiency, expanding the supply of next-generation alternative-energy vehicles, promoting road congestion-mitigation measures to improve traffic flow, and encouraging the adoption of ecodriving among all vehicle users.
- Japan’s automakers are, in addition, making significant strides in reducing CO2 emissions from their production plants. In 2008, JAMA committed itself to a joint autonomous action plan, together with the Japan Auto-Body Industries Association (JABIA), in a push for further plant CO2 reductions. Also last year, in view of the Japanese government’s trial launch of a consolidated domestic market for emissions trading, JAMA’s 14 member companies joined forces with JABIA’s 44 member companies and applied for participation in the emissions trading scheme.
Advancing International Cooperation and Understanding
- The global scale of the Japanese automobile industry’s operations underline, for us, the critical role of the free-trade system and of free-trade promotion in the international business environment and, likewise, in the recovery and stabilization of the world economy.
- Accordingly, JAMA looks forward to the successful conclusion of the World Trade Organization’s Doha Round of multilateral trade talks and, as a matter of policy, favors the establishment of economic partnership agreements between countries and regions.
- Other issues related to the globalization of business operations and of growing concern to the industry worldwide are the protection of intellectual property rights and the burden of double taxation caused by transfer pricing taxation both in Japan and abroad.
- JAMA will continue to address these issues from a standpoint that emphasizes close cooperation with governments and industry partners worldwide and, at the same time, reinforces the positions and policies of the government of Japan.
Promoting Increased Enjoyment and Comfort in Vehicle Use
- Reviving a sluggish domestic market is a challenge which Japanese automakers intend to address not only by supplying products that offer enhanced appeal and meet the diverse requirements of today’s consumers, but also by carrying out, in various areas, activities promoting the pleasure and convenience of automobile use.
- “Tokyo Motor Week 2008” was held, for the first time ever, in autumn last year—an “off” year for the Tokyo Motor Show. Appealing specifically to young people, the event brought a large viewing audience in touch with the latest vehicle models on the market. The visible delight and enthusiastic response of the participating public confirmed our opinion that Japanese consumers still harbor a keen interest in, and even a fascination with, the automobile.
- This year being an “on” year for the Tokyo Motor Show, JAMA is currently studying how best to organize the event. Keeping close tabs on developments in the global industry, we are aiming for a show concept that celebrates automotive excellence in an atmosphere truly geared to our times.
- From a different and longer-term perspective, JAMA is planning a complete renovation of the automobile displays at Tokyo’s Science Museum, so as to communicate to younger generations a new appreciation of the appeal of motor vehicles.
- JAMA and its members are also working to improve the automobile use environment in Japan. With the ongoing reform of the national tax system, the highly welcome decision was made at the end of last year to approve measures to exempt various types of low carbon-emitting vehicles from both the automobile acquisition tax and the tonnage tax, in the interest of promoting sustainable mobility in Japan. JAMA wholeheartedly endorses this decision and will, through its own activities, seek to reinforce the impact of this groundbreaking initiative on the vehicle market. In view of anticipated further revisions to the national tax structure, JAMA will this year once again call for a comprehensive review of Japan’s automotive taxes, for the dual purpose of simplifying their framework and significantly reducing the heavy financial burden they impose on motor vehicle owners.
- JAMA will also invest new effort in promoting: an early integration of Intelligent Transport Systems (ITS) into road infrastructure and other upgrades to the national road network; expanded motorcycle parking availability in urban areas; the implementation of measures to enhance the safety of the roadside environment taking into account Japan’s aging society; and the more widespread use of a new generation of assisted-mobility vehicles.
In 2009 JAMA will thus continue to work in close collaboration with its member companies towards the achievement of sustainability in road transport and a reaffirmation of the critical role played by the automobile industry in the economy and in society.
We look forward to your continued support and encouragement as we pursue our goals with redoubled determination.
