April 8, 2009

Passenger Car Market Trends
Summary of Results of JAMA’s Fiscal 2008 Survey

The Japan Automobile Manufacturers Association has published the results of its passenger car market survey conducted in fiscal 2008 (ending March 31, 2009).

This survey was conducted against the backdrop of indications that young Japanese adults are increasingly moving away from cars and car use. A key objective of the study, therefore, was to track how young people’s perceptions of cars could be expected to change over the coming years. To that end, students currently enrolled at university—who within the next few years will join the workforce and thus begin to participate in the vehicle market—were surveyed in their role as the “entry generation.”

The following areas of inquiry helped to better grasp the views of this generation:

  • The background and values pertaining to their lifestyle patterns;
  • Their perceptions of the appeal of cars; and
  • Needs and impediments with respect to car purchasing by them.

JAMA’s survey yielded basic information that is summarized as follows.

  • Members of the entry generation exhibit a pronounced tendency to hold pessimistic views of social and economic conditions. Arguably, this reflects their having grown up in an era of “pressure-free education” in the classroom, less opportunity to develop a sense of competition with others, and the fact that playing inside their homes was the norm.
  • Instead of striving hard to succeed, this demographic is strongly inclined to opt for living and work styles that avoid strain. These young people are passive with regard to spending money, with fewer of them interested in popular trends or what others own or use. An apparent decline in opportunities to engage in sports, leisure or other physical activities, and in occasions to venture outside the home during holidays, was also noted.
  • Fewer individuals in this generation own cars, contributing to a growing trend in shared-vehicle use among families. Car use for shopping is on the rise, while driving on holidays or for daily commutes to school is on a decline.
  • Although there has not been any definitive major shift in terms of the basic appeal of cars, fewer young people today have strong feelings towards car ownership. Meanwhile, a more cautious stance prevails with regard to the timing of a vehicle purchase.
  • Experiences/memories of riding in automobiles as children have an impact on later interest in cars, car design and other details.
  • The most popular passenger car among this generation is the “compact,” with sedans and sports-car types also being favored.
  • As a result of being exposed to an abundance of material commodities and a continuously expanding range of products and services, the level of interest in cars is in relative decline.
  • The entry generation’s primary sense of the role of cars is as products with a solid functional merit in terms of providing convenience in daily life, with glamour or ostentatiousness, ownership gratification and other potential points of appeal apparently in eclipse.
  • Identified as causes for the decline in strongly positive feelings about car purchasing were: “A waning sense of cars’ overall benefits,” “A rising awareness of environmental issues”; and “Increasingly significant purchasing deterrents, including impediments pertaining to cost, time and ownership responsibility.”
  • On the other hand, principal expectations with respect to cars include “greater computerization and ease of use” and ”improved environmental performance.”
  • To improve the passenger car use environment, survey responses indicated that reducing auto-related taxes, streamlining driver’s-license acquisition procedures and improving road transport infrastructure would be effective.



Overview of JAMA’s
Fiscal 2008 Passenger Car Market Trends Survey

1. Survey Profile

Survey Method Survey Targets/Respondents
Written questionnaire survey
  • Survey media (print):
    • Official government data information publications
    • Newspapers and magazines
    • Distribution targeting young people
  • Survey period: June through October 2008
Group interview survey
  • Survey targets:
    Male/female (M/W) students currently enrolled at university
    (4-year universities, junior colleges)
4 groups (20 persons total)   High interest in cars Average interest in cars
Major city (Tokyo) Major city G1
(4M / 2W)
(4M / 2W)
Provincial city (Utsunomiya) Provincial city G3
(4M / 2W)
(4M / 2W)
  • Survey period: September 12-25, 2008
Online survey
  • Survey respondents:
    1,600 individuals nationwide, M/W, aged 18-59
    • Current university/Junior college students (aged 18-24): 1,000
    • University/Graduate school graduates (aged 20-39): 300
    • University/Junior college graduates (aged 40-59): 300
  • Survey period: November 12-14, 2008

2. Survey Results

2.1 Background to “entry generation” lifestyle patterns

  • Because this generation was raised during the low-growth era following the collapse of Japan’s “bubble” economy, its members grew up with no real sense of prosperous times. As a result, there is a strong tendency for them to adopt pessimistic views of prevailing social and economic conditions. At school, the introduction of a “pressure-free” educational philosophy led to reductions in class time, suggesting that they had fewer opportunities to develop a sense of competition with others on the basis of comparative evaluation. At home, this generation generally got along well with their parents, while growing up with access to a wide range of gadgets and machinery (supporting a trend to play largely within the home).

2.2 Profile of “entry generation” lifestyle choices

  • Compared to university students in previous generations, this generation shows a strong inclination to choose living and work styles that avoid strain and intensive striving for “success.” Reflecting both a sense of uncertainty about the future and the desire to avoid overload, its members are more passive about using money than college students of the past, with fewer of them interested in popular trends or what others own or use. Declines were noted in opportunities to engage in sports, leisure or other physical activities, as well as in occasions to venture outside the home during holidays. Rather than searching out new encounters, this generation also displays a tendency to stress the importance of sustained personal relationships with old friends, companions of the same gender and so forth.

2.3 “Entry generation” perceptions of the appeal of cars

  • Interestingly, no real change has been noted in the desire to obtain a driver’s license. Examining how cars are used, those driving their parents’ car(s) (i.e., shared-use vehicles) are increasing, as are the occasions to ride with other family members. Regarding the purpose of car use, shopping is a rising factor, while use for leisure or commuting to school is in decline. Although the basic appeal of cars has not much changed, fewer young people have developed strong feelings in that direction. In the same way, although a basic interest in eventually purchasing a car remains, a somewhat less strong interest in such a purchase was noted, together with a cautious stance with respect to its timing. Factors impeding the purchase of a car included a greater awareness of maintenance costs and other financial burdens, and of the time and effort required to obtain a driver’s license.

2.4 “Entry generation” experience of cars and their car preferences

  • During their childhood years, members of this generation often took part in leisure and outdoor activities in minivans and other “people mover”-type vehicles, giving them fond and happy memories of the times spent in cars. In contrast, their current car preferences tend to be compact types, with positive impressions also held of sedans and “sporty” cars as well. The survey results confirmed that this generation’s interest in cars and car types has been affected by its own car experiences and by current conditions surrounding car use.

2.5 Views on cars relative to other consumer products and services

  • Material goods and possessions have been present in abundance for members of this generation since they were toddlers, a situation that has served to expand their ranges of interest and curiosity. As a result of the proliferation of sophisticated communications products and content (mobile phones with Internet access, electronic games, anime, etc.) and other commodities other than cars in which they find benefits, there has been a relative decline in their level of interest in cars. Their primary sense of the role of a car is as a product intended to provide convenience and “comfort” (i.e., independent mobility) in everyday life, with a declining trend noted in perceived psychological benefits such as the “glamour” factor and ownership gratification.

2.6 Deterrents to car ownership, non-deterring factors

  • Three causes were identified as factors behind the decline in strong feelings about purchasing cars compared to earlier generations of university students: 1) A waning sense of the benefits of cars; 2) A growing awareness of or concern with the environmental impact of motor vehicles; and 3) Increasing cost, time and “responsibility” impediments. Nevertheless, the number of young people expressing an interest in cars (about half) was by no means low, suggesting that this generation does in fact have desires and needs in terms of new functional/performance criteria for cars (and that products effectively addressing those needs will be capable of bringing latent demand to the fore).

2.7 Conclusions

  • While it was found that male university students living in large urban areas are indeed turning away from cars, the degree of interest in cars’ general and purchasing appeal is high among young women and individuals living outside large urban areas. This supports the conclusion that, overall, interest in cars and eventual car ownership is not vastly different from previous generations. The fact that this does not lead to actual car purchasing among young people appears to be the result of a widespread perception that the burden of car ownership outweighs its convenience.
  • Examining changes in the perceived usefulness of cars, the proliferation of computers, Internet- and e-mail-accessing mobile phones and other sophisticated electronic machinery has increased the amount of time that young people spend at home, causing a shift in preferences to a social environment in which communications can be maintained without displacement. This has effectively reduced the spectrum of opportunities for car use. In addition, with fewer opportunities to nurture a sense of competitiveness and an apparently declining interest in distinguishing oneself from others, the perceived value of car ownership has similarly lessened. With an abundance of material goods and a continuously expanding availability of products and services (other than cars) that project appeal, the lure of cars has, relatively speaking, experienced a decline.
  • Having grown up in sluggish (i.e., challenging) economic times, young adults today have shifted to more conservative values and behavior, while also becoming increasingly concerned about issues such as environmental protection. In addition, with the aforementioned constantly expanding availability of goods and services, car purchasing has come to represent for growing numbers of young people a significant financial investment, underscoring the perception that motor vehicle ownership is a “burden.”
  • In targeting this “entry generation,” therefore, it will be critical to raise the level of vehicle computerization, ease of use and environmental performance, while at the same time reducing the perceived burdens relating to cost and the investment of time and effort. The results of this survey suggest that lower auto-related taxes, simpler procedures for acquiring a driver’s license, and improved road transport infrastructure would constitute effective measures to reduce such burdens.