May 15, 2014

Outline of JAMA Business Activity in Fiscal 2014

The outlook for the business environment in Japan for the new fiscal year (ending March 31, 2015) cannot be said to be entirely positive.  Encouraging factors include the recovery in the global economy, driven primarily by an upswing in the U.S. economy, and increased business activity in Japan as a result of the Japanese government’s implementation of bold economic policies.  In contrast, there is concern over the potential for economic slowdowns in emerging economies and for a decline in domestic demand following the last-minute demand surge prior to the increase in the consumption tax from 5% to 8% on April 1 this year.

Fiscal 2014 will thus be a crucial year for the Japanese economy in terms of transitioning from upward momentum to sustained growth.  As a central player in Japan’s manufacturing sector, the automobile industry will take every possible action to support Japan’s economic recovery.  To that end, JAMA and its member manufacturers will address a range of issues, including the triple priorities of revitalizing the domestic vehicle market, enhancing the business environment, and achieving safe, comfortable, and environmentally sustainable mobility, while actively promoting the strengthening of the country’s manufacturing traditions and the appeal of motor vehicles.

1. Revitalizing the Domestic Auto Market
Sustaining the Japanese automotive industry’s foundation of excellence in manufacturing—the key to its competitive strength—requires, first of all, a halt to the two-decades-long stagnation in Japan’s domestic vehicle market.

In autumn last year, the 43rd edition of the Tokyo Motor Show boasted a final tally of more than 900,000 visitors, considerably exceeding the turnout at the previous show.  A parallel initiative was the launch of a new program in which top executives from JAMA member companies visited university campuses to engage directly with students in discussions on “the charisma of cars.”  Vigorous promotion of the appeal and enjoyment of car and motorcycle use will continue this year, to sustain the momentum generated by last year’s activities.

A further objective in revitalizing the domestic market is the easing of the particularly onerous tax burden imposed on automobile owners in Japan.  JAMA is determined to see the complete abolition of the automobile acquisition tax at the time of the second-stage hike in the national consumption tax to 10% (tentatively scheduled for October 2015), and will also work to ensure that a new environmental performance tax—an outline of which was included in the government’s tax reform package announced at the end of 2013—will, in its final form, be so structured as to provide a genuine alleviation of the tax burden on vehicle owners.

With a focus on the motorcycle market, JAMA will also continue to push for greater convenience in the motorcycle use environment by lobbying for an easing of the procedures required to obtain motorcycle licenses and for the expanded construction of motorcycle parking bays, among other measures.  

2. Enhancing the Business Environment
A longstanding obstacle to an improved business environment in Japan was the excessive appreciation of the yen against foreign currencies, but significant corrections have been made in this regard since late 2012.  However, other issues—including the securing of further free trade and economic partnership agreements and a safe, stable, and affordable domestic electric power supply, as well as a reduction in the corporate tax rate—still need to be addressed.

Nevertheless, the business environment is expected to be favorably impacted by the Japanese government’s new growth strategies and by its Next-Generation Vehicle Industrial Policy to be announced this June by the Ministry of Economy, Trade and Industry.  In the current business year, JAMA will urge the government to take the necessary measures to help ensure the generation of a strong tailwind in the desired direction.

3. Achieving Safe, Comfortable, and Environmentally Sustainable Mobility
JAMA fully supports the Japanese government’s goal of making Japan’s roads the safest in the world.  Even in the context of Japan’s rapidly graying population, efforts to reduce the occurrence of road accidents, injuries and fatalities will encompass, among other initiatives, the practical introduction of cutting-edge safety (including automated driving) technologies—with the ultimate objective being, in all cases, the achievement of safer, more comfortable and more convenient mobility for all road users including pedestrians.

Energy conservation and environmental protection will also remain priority issues, with JAMA member manufacturers advancing the development and market introduction in fiscal 2014 of fuel cell, electric, plug-in hybrid, clean diesel and other next-generation vehicles powered by alternative fuels.

Finally, the selection of Tokyo as the host city for the 2020 Olympic and Paralympic Games offers Japan a rare and exciting opportunity to showcase to the world its vision of the future of mobility.  Accordingly, the Japanese automobile industry will do its utmost to fulfill dreams and aspirations for the target date of 2020 by achieving road transport that is optimally smooth, efficient, safe for all users and environmentally responsible.