January 1, 2012

New Year’s Message

New Year's Message:
Enhancing Vehicle Use in a Changing Environment
Toshiyuki Shiga, Chairman
Japan Automobile Manufacturers Association, Inc.

January 1, 2012

In Japan, the year 2011 will long be remembered for its unprecedented series of disasters and their consequences.  First was the Great East Japan Earthquake followed by the tsunami on March 11, which triggered the Fukushima nuclear power plant accident and, subsequently, major disruptions in Japan’s electric power supply.  Compounding these conditions, Thailand’s massive floods in October not only resulted in tragedy, but severely impacted the motor industry as well.

In the face of such adversity, the automotive industry in Japan worked closely together to overcome the challenges posed by these various disasters.  Now, as we move into a new year, with the sense of hope and promise that accompanies such a transition, the industry intends to build on the many lessons learned in 2011 in order to achieve renewed growth and vitality.

Indeed, as one of Japan’s economic pillars and in its pursuit of enhanced motorization for all vehicle users, the automobile industry is determined to contribute to the recovery and further progress of the national economy in response to the devastation caused by the March 11 earthquake and tsunami.  Our efforts will be focused on the following three basic goals.  On the threshold of a new year, we take this opportunity to express our thanks for your continued support and encouragement.

Safeguarding Japanese manufacturing: As it gears up to face increasingly fierce global competition, the Japanese automobile industry’s greatest strength remains the manufacturing craftsmanship that it has so carefully nurtured over many decades.  This expertise constitutes the real lifeline of the industry. 

Yet, amid the stiff challenges posed by such disparate factors as punishingly steep yen appreciation, delays in the establishment of economic partnership and free trade agreements and an excessively burdensome corporate tax rate, maintaining production activities within Japan has become increasingly difficult.  This accelerating trend towards a hollowing out of the domestic auto industry can, however, still be reversed if swift and decisive action is taken.

To preserve the sustainability of domestic manufacturing activities, JAMA members will be taking firm steps on an individual basis to strengthen their capacity to resist yen appreciation, while the industry as a whole will make vigorous appeals to the government to enact measures that will help mitigate or resolve the challenges referred to above, among others.  The objective will be to help maintain a domestic business environment that enables Japanese automakers to compete on an equal footing with overseas manufacturers.

Reinvigorating the domestic market: For more than twenty years, Japan has seen a steady contraction of its domestic automobile market.  A prolongation of this market slump could jeopardize the country’s manufacturing foundations, which would have a grave impact on the economy and employment in Japan.  With so much at stake, the revitalization of the domestic vehicle market has become a matter of pressing importance.

To that end, the Japanese automobile industry is and will continue making every effort to supply the market with charismatic vehicles that genuinely appeal to consumers’ diverse needs.  However, reviving the vehicle market will also require reductions in Japan’s automobile-related taxes, which pose an extremely onerous burden on vehicle users.

Late last year, the Japanese government announced tax reform proposals that included reductions in the automobile tonnage tax and a three-year extension of tax breaks on “eco-friendly” fuel-efficient vehicles, as well as the reintroduction of subsidies for their purchase.  For its part, the auto industry intends to make the most of these measures in the push to restore the market.  Still, the fact remains that automobile users in Japan would like to see the abolition of the automobile acquisition and tonnage taxes, which long ago lost any justification as viable taxation measures.  JAMA and the industry will therefore continue to lobby the government for their complete elimination.

In the shift to low-carbon transport, Japan’s automakers are developing and supplying the market with vehicles that excel in environmental performance, and there is no question that they will be intensifying and accelerating such efforts over the coming years.  Meanwhile, the government is targeting a growth in the share of advanced eco-friendly models in new vehicle sales to 80% by the year 2020.  To achieve that goal, facilitating the purchase of such vehicles by consumers will be imperative.  Accordingly, JAMA will be making sustained appeals to the government for the introduction of effective incentive measures. 

Promoting safer and more convenient vehicle use: Notwithstanding the steady decline in road accidents, fatalities, and injuries in Japan in recent years, a constant priority for Japanese automakers is to continuously advance the research and development of automotive safety technologies, in terms of both active safety (accident avoidance) and passive safety (injury mitigation), so as to supply the market with ever safer vehicles.

In addition to advancing in-vehicle safety technologies, JAMA member companies also regularly conduct public road-safety awareness campaigns as well as driver education programs, and promote the adoption of wide-ranging measures to improve the vehicle use environment.  Through such initiatives, which collectively address the three interrelated factors involved in road safety—namely, road users, vehicles, and road infrastructure—the automakers   aim to help the government achieve its goal of making Japan’s roads the safest in the world.

Automobiles play an essential role in sustaining economic activities around the world and in enhancing people’s lives.  Japan’s automakers are therefore always seeking to meet society’s evolving requirements with respect to automotive performance.  Looking ahead, we will be working hard to continue providing products that most effectively respond to the diversified lifestyle needs of vehicle users of all ages.  This will involve enhancing the value of automobiles as key elements underpinning social infrastructure, from the core perspectives of optimizing the use of energy supplies as well as information and communications networks, in order to achieve safe, comfortable and highly convenient motorization.