JAIA Chairman Press Meeting (July 2010)

Following is a summary of the comments made by JAIA Chairman at a press meeting held on July 22 (Thu), 2010.

Mr. Roland Krüger

Motor vehicle market in Japan

 First point is where we are with regards to the market. The economy is actually recovering in Japan and we see that there is some stabilization and some growth. The same is true for the Japanese car market, and according to the data of registered vehicles that was just announced, the number of cars registered in Japan for the first half year of 2010 is on the same level as the year 2008, and has recovered by 20 percent versus the crisis year of 2009.
 This is a very positive development; nevertheless, for the imported vehicles, we regret to say that, although there is some growth in comparison with 2009, we are still not on the same level as the first half of 2008.
 In fact, when we look at passenger cars, the number is quite staggering at minus 20 percent versus the year 2008. We are recovering versus 2009, but again, we would have to also look back to the years before the crisis, and the imported cars still are not the same level.

1H results of imported car market

 For passenger cars in the import market, the importers have registered 91,700 cars, plus some light commercial and commercial vehicles, altogether, 97,282 vehicles to be precise, which represents growth of a total of 11 percent and a little bit more. But again, it is 19 percent behind the level in 2008.
 While we have still some way to go to come back to the same level, we also see a downsizing trend in the market. The vehicle market is shifting to smaller cars, which are actually in the lead of growth also for domestic car manufacturers.
 That means that our members, the importers, continue to launch more smaller vehicles, with some of the members quite successfully. You can see them in some areas of growth. Nevertheless, all of the members are very much concerned about possible impact of the reduction of the eco-tax support in the end of September.

Projection on imported car market for 2H

 That brings me to the projection for the second half. We cannot ignore that the impact of the eco-tax subsidy in the end of September will be seen in the market, and unfortunately, much fewer vehicles of the importers actually qualify for the eco-tax; nevertheless, the impact will be there.
 At the same time as our members continue their efforts to bring more eco-tax eligible cars into the market, we will have more efforts also to have cars under the PHP, or PHP-certified vehicles. It was a very helpful change in scheme by the authorities, and we would like to thank them again for the possibility that the importers could import cars with PHP and certify for the eco-tax.

Motorcycle services

 In addition to what we are doing in the automotive market, we have also established a motorcycle committee. As announced at our 45th general assembly in May, as of 1st of July, we established the Motorcycle Committee within JAIA.
 This is quite a historic event as I mentioned in the press conference during the general assembly. The members as of today of the motorcycle committee, and also members of JAIA, include Ducati Japan, Harley-Davidson Japan, KTM Japan and Piaggio Group Japan, as well as BMW, and the board member representing motorcycles is Mr. Walters, who is the president of Harley-Davidson here in Japan.
 Same as for the four-wheelers, it will be able for the two-wheelers to submit to the ministries concerned requests of the import of motorcycles in Japan with regards to laws, regulations and the like. In addition, we will take action by the industry association on safety measures and other issues to enhance the confidence of our customers in motorcycles, while at the same time supporting the import of motorcycles especially for our members.
 With regards to the certification of imported motorcycles, JAIA will approach the Ministry of Land, Infrastructure and Transport to bring efficient administration of processes and extend the benefits that we can see already for four-wheelers to motorbikes and thereby stimulate the market, again supporting our customers, our business partners, and of course our members here at JAIA. We will also encourage further importers to join us at JAIA for these activities.

Tokyo Motor Show

 The next point I mentioned is Tokyo Motor Show. There has been a very positive development we would like to announce. The organizer, the Japan Automobile Manufacturers Association, has actually decided to ask JAIA to join the organization committee to co-organize and co-chair the Tokyo Motor Show.
 We would like to thank JAMA, namely the new chairman, for that initiative. I personally met him last Friday to discuss this again. It was a very positive discussion, and we look forward to working with the committee to help organize and plan part of the Tokyo Motor Show.
 As you have most probably received the information, the Tokyo Motor Show will be called a “new-born” motor show to be held at different timing between 2nd and 11th of December 2011. Also the venue has shifted to the Tokyo Big Sight.
 We have approached all our members before deciding the co-organizing, and they have given very favorable responses, so we decided to support that activity. Nevertheless, I would like to specifically mention that, with the co-organizing, and support of the planning and organization of the Tokyo Motor Show, which we very much welcome, we still leave it to the individual discretion of each and every member to decide if and when they want to join the next Tokyo Motor Show. It is up to each and every company to decide this. As JAIA, we can support and help, but we cannot decide if each and every member will join the next time. This is something each and every company will have to announce in due time.

Submission of taxation request

 In addition to these positive developments, we also have some topics that are still in the procedure of evaluation, which we have to highlight again today. That is the submission of taxation request that we have forwarded to the authorities, namely the Ministry of Economy, Trade and Industry. This request included three key points: streamlining and reductions of taxes relating to acquisition and ownership of motor vehicles; review of fuel taxation and action to combat global warming; and, adoption of a tax based on fair and equal treatment from an international perspective, and especially, for our importers as members.
1.On the first point, it is of the foremost importance to streamline and reduce the complex and excessive taxes on autos. In particular, we believe that the taxes on vehicles with regards to acquisition and tonnage should be abolished, and the taxes on vehicle ownership should be minimized from the standpoint of the car users and based on objective viewpoints.
2.On the second point, the ongoing complex system of fuel taxes should be reviewed, and from the aspect of environmental measures, it should also include the CO2 emissions as it is developing and already practiced in other countries across the world.
3.On the last point, we would like to have a base of levy that attains and supports a low carbon society, and we should again conform to international, harmonized standards as fair and as equal as possible.
 These taxation requests have been forwarded to the ministry, and there will be further discussions and hearings, but it is very clear that, as importers and the importers association, the most important point is that we have this treated on a fair basis.

Technical issues

 That brings me to last and probably the most important point, which are the technical issues that we need to tackle.
 The global unification of test cycles for emissions and fuel efficiency, and adoption of them in Japan, is one of the most important issues that we have to deal with. For the World Light Duty Testing Cycle (WLTC), the Ministry of Land, Infrastructure and Transport and the Japan Automobile Standards Internationalization Center (JASIC) are focusing their efforts on establishing at the UN Economic Commission the Work Package 29, the unified, or standardized, test cycles. We are determined to continuing our lobbying activities on the issue for quick adoption and attainment of the Work Package 29.
 Also, after the establishment of the WLTC, the timing of introduction in Japan will be an issue of highest significance. We need to ensure the implementation, and at the moment, the timeframe stands at 2020. If that can be pulled forward, or can be done earlier, that is very much appreciated for our members; nevertheless, we will support adoption as soon as possible here in Japan.
 Second is the prompt institution and implementation in Japan of the International Whole Vehicle Type Approval System, or IWVTA. Japan’s type approval systems tend to be very unique, imposing some burdens for imported vehicles to obtain that certification. The IWVTA system is indispensable, which can lead to stimulation of the imported car market as well as the total market, and it will reduce burdens and costs on the industry.
 This is something that we should not underestimate and I would like to mention again that JAIA is of course representing its member companies, but at the same time, JAIA also represents the local business partners, which are our dealers. Every cost burden, especially technical cost burden, will also have impact on the whole business model, and if we can unify these standards and adopt them, that will also have a positive effect on the whole chain and the business model.
 And the third issue, which is based on mid- to long-range perspective, is to address new environmental measures that will be introduced and promote new technologies in the years to come. That is namely electric vehicles, hybrid vehicles and fuel-cell vehicles, i.e. low or zero emission vehicles, on which we are already working.
 Because of the introduction of new vehicles, there is to be expected a whole range of technical guidelines. We as JAIA want to make sure that these technical guidelines are done, again, in a fair and equal manner, and that they are based on international, harmonized standards.
 Also, along with the full-scale penetration of electric vehicles, broad-ranging new laws and regulations will be established, including the standards for recharging, safety and high-voltage. They will also be affecting our business partners because servicing electric vehicles in our dealerships is a change also for our business partners, and we have to take care of that.
 We will be gathering information and discussing actions on these issues with the authorities with regards to laws, regulations and standards, and anticipated future developments, while closely sharing that information with our members.