Following is a summary of the comments made by JAIA Chairman at a press meeting held on July 27 (Thu), 2011.

Earthquake

On behalf of the importers and overseas manufacturers here in Japan, I would like to extend condolences to all those affected by the Great East Japan Earthquake. JAIA was instrumental in coordinating the relief efforts of the importers and manufacturers including donations (which exceeded 6.5 million euro), volunteer work and other support activities. We hope that we can actually help to recover not only the economic power of Japan, but also the personal sufferings, and I would like to reassure that we as the importers in Japan will do the utmost to overcome this very serious situation.

Result and Outlook

We have seen stabilization of the market and therefore, the worst of the economic impact has been overcome. For the auto sector, the hard-hit supply chains are being constantly recovered, and the production of our colleague domestic car manufactures is back on track for revival.

Despite the situation, the total number of imported vehicles registered during the first half of 2011 was around 131,000 units, up about 35 percent from the same period last year. As a result, the share of imported cars to the overall registered vehicles in the period was 11.0 percent, which is quite a significant share. Also, the imported cars of overseas brands grew about seven percent to around 95,000 vehicles, a very positive development. Of these vehicles, the models eligible for the eco tax incentives are around 40 percent, an indication that the overseas manufacturers’ efforts to launch models suited for Japan’s eco tax scheme in the last two years are showing positive effects.

Toward the second half of 2011, these models with higher environmental performance and suited for the Japanese scheme will be launched even more. We will have to make sure that our efforts in producing and introducing products that match the needs of those customers seeking “distinctive features of imported cars” will be met. However, as the production systems of the Japanese car manufacturers improve, the share of imports to the overall market will most likely go down in the second half.

On the other hand, we have growing expectations for the introduction of new technologies that will create new demand, including next generation vehicles such as EV and PHEV, and more dependable models equipped with such safe driving assist systems as auto brake systems. With the introduction of these technologies to be marketed as attractive products of individual brands, we will create higher demand for importers and that, in turn, will contribute to the continued growth of the imported car sector and car manufacturing as a whole here in Japan.

JAIA Activities

For major policy issues, I would like to bring a few points to attention: globally harmonized fuel efficiency standards; globally harmonized vehicle certification systems; promotion of safe vehicles; and, the next generation vehicle, or NGV, which is very important.

Let’s start with the NGV. There is no doubt that these vehicles will penetrate the market in the future both in Japan and overseas. It is important for us to be involved in the development of infrastructure, establishment of standards/regulations and harmonization processes, in cooperation with the authorities, for battery chargers, BEV and PHEV, as well as recycling and disposal of batteries.

With regards to the fuel efficiency standards of 2020, we are having discussions together with the ministries. While FE standards can contribute mostly to CO2 reductions, they also have huge impacts on product planning and technological development of our member companies. Therefore it is of the greatest interest of JAIA to be involved in these discussions.

In relation to the Worldwide Harmonized Light-duty Test Procedures (WLTP), JAIA has been calling for globally harmonized test procedures for quite some time, and once established, the adoption of such procedures for the 2020 FE standards. Also for the globally harmonized standards for vehicle certification (IWVTA), we will continue to participate in the discussions. Establishment of IWVTA, and subsequent adoption by Japan, will most likely lead to widespread use of environmentally- riendly vehicles and NGV, and JAIA will support the activities of MLIT in this area.

I would like also to stress that the authorities and ministries, especially our colleagues of MLIT, have been very supportive for the importers in many areas and take this opportunity to extend my thanks to everyone involved. This has been a very great step forward; nevertheless, the standards are not harmonized yet, and we have to work together to get it done.

Internal Reorganization

JAIA has reorganized the committee structure to properly address the technical issues mentioned earlier. In particular, for seamless introductions and promotion of NGV, the existing Environmental and Safety Strategy Committee (ESSC) was renamed to the Next Generation Vehicle Committee (NGVC). Furthermore, in response to the strengthened consumer administration and for the purpose of quick action to address recall issues, the After Sales Committee was established as a new body.

We are convinced that, combined with the ongoing Standards and Certification Committee and Recycling Committee, we now have in place a structure to address, in a comprehensive and prompt manner, various issues, such as technological standards, environmental regulations, tax and incentives.

Motorcycles

In July last year, we integrated the importers of motorcycles into JAIA and the Motorcycle Committee was established at the same time. The Committee has been taking initiatives in taking actions as the whole industry to address issues, which used to be handled separately by individual companies. These are all designed for more effective activities and visible results. In particular, for the procedures to obtain certification, we are approaching MLIT for efficient and flexible actions, aiming at extending benefits to motorcycle users as well as stimulating the market.

Unfortunately, what we see is that the motorcycle market, the imported market in particular, in comparison to the imported car segment, is not growing. We aim to bundle our activities and stimulate the market in this area. This is unfortunate for our member companies, and we hope we can overcome this difficult situation very soon.

Tax Request

In JAIA’s Request for Taxation Revision, which has been submitted to the ministries concerned, we are calling for the simplification of the taxes as well as a reduction of tax burdens. Amid the difficult market at the moment, it is clear that the heavy tax burdens on purchasing and owning vehicles have been a major factor of discouraging willingness of consumers to purchase cars. Heavy taxes are not a productive topic to encourage consumption.

In addition, we will participate in the hearings by METI and other ministries to take our statements directly to the government, as in last year. Also at the Automobile Taxation Reform Forum and other occasions, we will constantly and vigorously approach the parties concerned with our efforts to clarify our standpoint and what we believe will help the automotive market here in Japan.

TMS

Many of our member companies will participate in the Tokyo Motor Show 2011. We have left it up to the individual discretion of the member companies to decide if they want to participate or not, but many of them have decided to participate and that is a very significant step forward despite the difficult economic time. It is also a sign of confidence and commitment of the automotive importers here in Japan towards the market.

JAIA will serve as a co-organizer of the show and JAIA chairman will serve as a vice chairman of the TMS. But more importantly, the secretariat of JAIA has been involved in preparatory meetings, making sure that views of the importers are stated. I am sure that the TMS will be successful and that the importer companies will add to the excitement of the show.

Closing

JAIA is determined to continue contributing to the development of the car market here in Japan. While we as JAIA represent the automotive importers in Japan, we as the importers also have important networks of domestic dealers that have invested in our car brands, supporting a large part of the domestic economy. It is our duty and responsibility, especially in these hard times, to support them as much as we can.

In addition to collaborating with the dealer association, JADA, we also cooperate with JAMA and other industry groups on various issues, and as mentioned earlier, we are in close contact with the authorities and ministries, METI, MLIT and other government bodies. I would like to extend my thanks, on behalf of JAIA, for their support, which are highly appreciated by many of the member companies.