May 15, 2008

JAMA Fiscal 2008 Business Plan
Emphasis on Safety and the Environment, International Cooperation,
Greater Enjoyment in Automobile Use

Japan’s economy in fiscal 2008 (ending March 31, 2009) is expected to reflect a general trend marked by gradual business recovery. Although the immediate outlook for the United States economy remains unclear, firm growth is forecast for China, India and other emerging economies, with steady capital investment projected to continue against a backdrop of strong corporate performance.

As a result of a number of factors including a slowdown in consumer spending amid rising commodity prices and other developments resulting from the surge in crude oil prices, as well as a continued decline in the number of vehicles affected by Japan’s Motor Vehicle NOx and PM Emissions Act, domestic demand in fiscal 2008 is expected to finish below the fiscal 2007 level.

Export shipments should finish at about the same level as in 2007, owing to solid overseas demand and despite accelerated local production and currency market trends.

Motorcycle demand in Japan was boosted by the introduction of a new automatic-transmission motorcycle license category in 2005, by the abolition of the ban on expressway tandem riding, and by the application in 2006 of electronic toll collection to motorcycles. As was the case in 2007, however, market structure will continue to be adversely affected by Japan’s shrinking youth demographic and fewer new moped licensees, causing motorcycle demand in 2008 to drop below the previous year’s level.

On the other hand, motorcycle demand in Asian and other overseas markets should be firm, with local production operations continuing to turn in strong performance figures.

As a core industry, automobile manufacturing in Japan shoulders a heavy responsibility in contributing to further economic development and social well-being. To fulfill this obligation, the industry must remain vital and keenly focused on the challenges ahead, while continuously aiming for greater innovation and further advancement.

Specific issues to be addressed are numerous and wide-ranging. In 2008 JAMA will redouble its efforts in three priority areas, namely: (1) Promoting safety and environmental protection in road transport; (2) Promoting greater mutual understanding and cooperation at the international level, against the backdrop of increased globalization; and (3) Promoting greater enjoyment and convenience in automobile use, which should also help boost a recovery in the vehicle market.

Details regarding JAMA’s approach to these three key issues follow below.

(1) Promoting Safety and Environmental Protection

In 2008 JAMA will continue to work towards the achievement of the Japanese government’s goal of making Japan’s roads “the safest in the world.” This will involve vigorous efforts in terms of both hardware and “software” through the further development and application of in-vehicle safety technologies and the conduct of public awareness campaigns, among other measures.

Road safety campaigns will be important tools in raising public awareness particularly in regard to: (1) backseat safety belt use, which remains low in Japan; (2) the correct wearing of motorcycle helmets; (3) bicycle road safety; (4) the prevention of drunk driving. Training programs designed specifically for elderly drivers are also slated for implementation, while cooperation between the public and private sectors will be aimed at expediting the commercialization of safe-driving support systems applying ITS technologies.

With respect to the environment, effective action to help counter global warming is the single most urgent priority for fiscal 2008 and well into the future. As part of the effort to achieve Japan’s numerical target under the Kyoto Protocol to the United Nations Framework Convention on Climate Change, programs promoting the introduction and diffusion of highly fuel-efficient automobiles will be expanded and technological development for next-generation low-carbon vehicles will be accelerated through a strategic mix of cooperation and competition.

Other activity in this area will include the promotion of independent strategies for CO2 reduction in the manufacturing process, lobbying for the implementation of measures to mitigate road congestion, and public awareness-raising initiatives highlighting the fuel-conserving benefits of ecodriving. JAMA will also continue to work proactively towards the achievement of a post-Kyoto Protocol framework for the reduction of greenhouse gas emissions.

The Toyako Summit, this year’s gathering of the leaders of the Group of Eight industrialized countries (G8), will be held in July at Lake Toyako on Japan’s northern island of Hokkaido. JAMA will lend its support to this meeting by, among other measures, supplying it with vehicles equipped with cutting-edge environmental technologies.

(2) Promoting Greater Mutual Understanding and Cooperation at the International Level

The automobile industry develops business activities in countries around the world, and for this reason it considers progress in the environments for trade, investment, intellectual property protection and technical standards to be of key significance.

JAMA has high hopes for the ongoing Doha Round of multilateral trade negotiations conducted under the auspices of the World Trade Organization and for the establishment of economic partnership agreements (EPAs) between countries or regions, and will continue to support Japan’s initiatives in these areas through its active lobbying of overseas governments and industries. As regards an EPA with the European Union, a Japan-EU research group has been established to explore this prospect, and JAMA looks forward to the evolution of these first steps into full-fledged government-level talks.

Intellectual property infringement is today an issue of worldwide scope. In the auto sector, market penetration of copies of motorcycle and other vehicle designs and of counterfeit parts is widespread, with consumers increasingly suffering the adverse consequences of these products’ inferior quality. JAMA is deeply concerned about this trend and will continue to work with the Japanese government and related entities in appealing for the implementation of effective solutions to this challenge.

During this fiscal year, the global auto industry meetings for passenger cars and heavy-duty vehicles, respectively, will once again be held. JAMA will use those occasions to promote meaningful dialogues with industry leaders from around the world so as to advance mutual understanding and progress on a global scale.

JAMA intends also to continue contributing to activities sponsored by the Japanese government and international entities aimed at the worldwide harmonization of automotive technical standards and mutual recognition of type approvals, thereby helping global efforts in this key area.

(3) Promoting Greater Enjoyment and Convenience in Automobile Use

JAMA member manufacturers are committed to supplying products that meet the requirements of today’s consumers by incorporating advanced information technology (IT) systems and other cutting-edge features. At the same time, efforts will be made to offer, in a wider range of venues, greater opportunities for the public, and younger drivers in particular, to gain “hands-on” experience in the operation of such vehicles, in order to help boost the appeal of automobiles and their use.

Efforts will also be made to enhance the environment for automobile use by, among other initiatives, supporting measures to increase road safety and the convenience of road travel. The ultimate goal will be to optimize the enthusiasm and satisfaction of both car and motorcycle users.

The current fiscal year will, in addition, see continued JAMA activity in promoting the simplification of and reductions in automobile taxes; improvements to roads and road infrastructure; further advances in intelligent transport systems (ITS) for increased safety and convenience for vehicle users; the greater availability of motorcycle parking bays; and progress in the development of assisted-mobility vehicles, among other measures.

JAMA is confident that meeting these various goals will help invigorate the home market and promote continued development for the automobile industry at large.