January 1, 2015

New Year’s Message from JAMA
Fumihiko Ike, Chairman, Japan Automobile Manufacturers Association, Inc.

From JAMA and its members, warmest wishes to all for a very happy new year.

The results of Japan’s Lower House election in December last year can be viewed as an indication of voters’ evaluation of the “Abenomics” stimulus policies implemented to date by the administration of Prime Minister Shinzo Abe, and of their expectations for the infusion of further growth strategies going forward.

The greater-than-anticipated impact of the April 2014 hike in Japan’s consumption tax has indeed fuelled hopes that the new Abe administration will act with speed and resolve in promoting bold economic policies, including the implementation of growth strategies and election platform pledges, to accelerate business recovery and Japan’s transition into a full-fledged positive growth cycle. 

Sustainable growth in Japan’s domestic vehicle market faced a tough challenge last year when overall consumer confidence chilled following the consumption tax increase in April and a pre-tax hike rush in demand.  With the scheduled rises in mini-vehicle tax rates applicable to new vehicles purchased from April this year, stringent market conditions are also projected for 2015.  Through the introduction of attractive new models and other initiatives, the automobile industry will pursue all possible measures to stimulate domestic demand.

Despite slowdowns in some emerging economies, the global vehicle market in 2014 was supported by robust demand in the United States.  Expectations for 2015 include continued buoyant demand in the U.S., a strong recovery in Europe, and growth in emerging markets.  However, optimism in regard to the overseas sector is mitigated by such factors as the risks of downturn prompted by uncertainty in the global economy and intensified international competition.

Being a pillar of the national economy, Japan’s automobile industry has a critical role to play in promoting growth.  In 2015, although the challenges in our path will be considerable and diverse, our priorities will remain the following: revitalizing the domestic market; improving the business environment; and creating safer, more comfortable and sustainable mobility.

Revitalizing the domestic market  
Targeting a reversal of the more than two-decades-long sluggishness in the domestic vehicle market, the Japanese automobile industry will press on with its core mission of supplying customers with automobiles and motorcycles of ever greater value and outstanding appeal.

Various events in 2014—including the “Tokyo Motor Festival 2014,” a “Motorcycle Day” in Hamamatsu, and a program of visits by top industry executives to university campuses for awareness-raising sessions with students—were held to promote the positive profile of motor vehicles among members of the public not necessarily directly familiar with their use.  This year’s highlight will be the 44th Tokyo Motor Show, opening on October 29 under the theme “Your heart will race.”  Aiming to create an exciting and inspiring experience for visitors, preparations for this gala event, a global showcase for the latest advances in automotive technology, are already well underway.

Domestic market revitalization is also predicated on the provision of an environment that facilitates the ownership and use of motor vehicles.  Among the many issues to be addressed in regard to the vehicle use environment, there is an especially urgent need for major revisions to Japan’s automobile-related taxes which, compared with those of other countries, are extremely burdensome.

Faced with a stagnant domestic market, the ruling coalition released at the end of last year a tax plan for fiscal 2015 which lowers the tax burden on vehicle owners through specific provisions, implements compensatory measures for the introduction of surcharges on older mini-vehicles, and delays for one year the launch date of hikes in the tax on motorcycles.  We are grateful for these government initiatives and appreciative of the efforts of those involved in their formulation.

However, issues that still need to be addressed include, first, the modifications to the automobile tax based on environmental performance which are to be introduced at the time the consumption tax rate is raised to 10% and, second, the simplification of Japan’s auto tax structure and the reductions in tax rates (including the automobile and tonnage tax rates) which JAMA has long called for.  While our industry will seek to make the most of the latest auto-related tax revisions, we also request that the government adopt additional measures to lower the overall tax burden on motor vehicle owners in Japan.

Last year also saw JAMA collaborating with industry partners, local governments and other stakeholders in the compilation of a “Roadmap for Motorcycle Industry Policy.”  This year, specifically to promote greater convenience in motorcycle ownership and use, we will energetically promote, among other measures, the adoption of simplified requirements for motorcycle licensing and an expanded availability of motorcycle parking bays.

Improving the business environment
An enhanced domestic business environment is essential to sustaining production and employment, and thereby securing the foundation of Japanese manufacturing.  In turn, a revitalized industrial sector, with greater international competitiveness, is critical to achieving long-term economic growth.  Current government growth strategies include a progressive reduction in the corporate tax rate to below 30%; improvements in the investment environment for research and development; and the promotion of economic partnership agreements between countries or regions.  JAMA looks forward to continuous efforts by the Japanese government to achieve a better business environment by implementing these strategies with optimum speed.

Accordingly, we welcome not only the government’s inclusion in its aforementioned latest tax plan of an initial corporate tax rate cut effective from this April (which favorably outweighs the burden imposed on companies by provisions also introduced in the plan to compensate for the revenue shortfall created by the tax cut) but, as well, its decision to maintain existing tax incentives for research-and-development activity, because these initiatives will bolster our industry’s international competitiveness.

In view of our industry’s deep commitment to global-scale business development, we consider it vital to achieve freer trade and investment based on the formulation of common rules.  We are therefore vocal advocates of accelerating the pace of talks to reach early accord on, in particular, the Trans-Pacific Partnership Agreement and the European Union-Japan Economic Partnership Agreement.

For our part, we will persevere in the development of cutting-edge technologies, in the fostering of human resources to further enhance our global competitiveness, and in our own efforts to improve the business environment, in support of economic revitalization.

Our priority mission: Creating safe, comfortable and sustainable mobility
Leading priorities for the Japanese automobile industry, just as for vehicle users, are, more than ever, automotive safety and environmental sustainability.  In response to the massive-scale quality issue that recently came to light, we have taken to heart the need to address this matter earnestly and comprehensively in order to restore the confidence of consumers.

JAMA and its members are continuously engaged in a multitude of initiatives aimed at achieving greater safety for all road users, including the elderly who today account for over half of Japan’s annual road fatalities.  In 2015, Japanese automakers are targeting further advances in onboard driving support systems and in Intelligent Transport Systems (ITS)-based road-to-vehicle and vehicle-to-vehicle technologies.  Moreover, in support of the Japanese government’s goal of making road transport in Japan the safest in the world and in parallel with the focus on vehicle technologies, JAMA and its members will continue to conduct their road safety awareness promotional campaigns and educational programs as well as their lobbying activities for improvements in the road use environment.

With respect to energy and environmental issues, countries that are signatories to the United Nations Framework Convention on Climate Change have been asked, in the lead-up to the 21st Conference of Parties to be held later this year, to submit their respective greenhouse gas emissions reduction targets (or Intended Nationally Determined Contributions) applicable post 2020.  For its part, the Japanese automobile industry continues to advance the development and commercialization of next-generation vehicles that will contribute to efforts to counter global warming, achieve energy security and improve air quality.

Progress in automotive environmental technologies will not be restricted to alternative-powered vehicles—a sector in which Japan is the global leader.  With the projected growth in automobile ownership in emerging markets in the coming years, increased fuel efficiency in vehicles equipped with conventional internal combustion engines will also be a factor in reducing CO2 emissions in road transport.

Meanwhile, JAMA and its members are working with related industries and petitioning for government support in expanding the infrastructure required for the wider use of fuel-cell and electric vehicles.

With the approach of the 2020 Olympic and Paralympic Games in Tokyo, broad- ranging initiatives have been launched to build the foundations of Japan’s future society.  The Japanese automobile industry will be working closely with the central and local governments, industry partners and other relevant stakeholders to achieve genuinely innovative mobility for 2020 and thereafter, for a brighter and sustainable tomorrow.

Our overarching objective is the achievement of motorization that provides world-leading safety, comfort and environmental sustainability, which we will vigorously pursue by advancing our efforts in all areas concerned.    

We will be grateful for your continued support and input throughout 2015.