JAIA Chairman’s Press Conference Speech, January 2024

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Chairman's Press Conference January 29, 2024

JAIA Chairman’s Press Conference Speech, January 2024

Mr .Kintaro UENO

1. Opening remarks

First of all, I would like to express my heartfelt condolences to those who lost their lives in the 2024 Noto Peninsula Earthquake that occurred on January 1st. I would also like to express our sympathies to those affected by the disaster. We sincerely pray for the safety of the disaster-stricken areas and the earliest possible recovery.

In recent years, there has been increasing momentum to achieve carbon neutrality. JAIA member companies are working to address new challenges associated with technological developments so that they can provide Japanese customers with a wide variety of imported cars from around the world equipped with cutting-edge safety and environmental technologies, including xEVs. By delivering imported cars with a variety of appeal to Japanese customers, we will do our utmost to revitalize the Japanese automobile market and contribute to the development of a sustainable mobility society in Japan.

2. Review of imported car sales in 2023

Regarding the domestic automobile market in 2023, the number of registered vehicles was approximately 3.03 million, exceeding the previous year for the first time in six years. The number of registered foreign-brands vehicles in calendar year 2023 increased by 2.5% from the previous year to 248,329 units, exceeding the previous year for the first time in two years since 2021.

In particular, imported EVs are doing very well. At at the press conference in July last year, I told you that we were looking at 20,000 units a year. and the number of registered imported EVs in 2023 increased by approximately 60% from the previous year to 22,890 units, exceeding 20,000 units, posting the record high number of units for five consecutive years since 2019. The number in 2023 is a 15-fold increase in five years from approximately 1,400 units in 2019. This result has been possible thanks to the government’s continuous support measures such as subsidies, and the active expansion of the EV lineup by JAIA member companies to meet customer needs.

The lineups of imported EVs was 20 models of 10 brands in 2020, but as of the end of 2023, it has increased to 118 models of 17 brands, including commercial vehicles and EVs are expanding from large to small vehicles to a wide variety of models such as SUVs, luxury models and sports types, so users’ options are also expanding. As imported cars have led the electric vehicle market, we can see the issues related to electrification, such as charging infrastructure and recycling clearer. I will talk about the details later.

3. Outlook for imported car sales in 2024

Next, I will present the outlook for imported car sales in 2024. Regarding the impact of vehicle supply delays that have continued since 2020, the situation varies depending on the member importer company, but overall the situation is on a recovery trend. In addition, JAIA member companies are planning to actively introduce new models, so we believe that imported car sales will continue to be strong this year.

Especially regarding xEVs, in addition to tax benefits, support from the government such as subsidies is granted. We expect that the number of xEVs sold will increase as the member companies will actively introduce xEVs into the Japanese market. As I told you, last year’s results show that the proportion of EVs among foreign-brand vehicles has increased to 9.2%. The day when one in ten foreign-brand cars will be BEVs is just around the corner, so they will likely be a stronger driver of the imported car market.

For three days starting tomorrow, JAIA will be holding a joint media test drive event of JAIA members in Oiso, Kanagawa Prefecture. Every year, the latest lineups from various companies are lined up at this test drive event, and this year, of the approximately 70 test cars, 40% are EVs, and including PHEVs, the number exceeds 50% which were less than 10% before the pandemic. I think it shows the presence of xEVs in foreign brands vehicles. Since 2021, JAIA has continued to make efforts to raise awareness of xEV through holding events. Specific details will be given later. Through activities carried out with the active participation and cooperation of JAIA members, we feel that imported EVs are becoming more and more popular among Japanese customers. We are considering continuing this activity.

On the other hand, while we are fully aware of various policies and market trends toward decarbonization in other countries for example in Germany, the share of BEVs expanded to 18.4% in 2023. In Japan, it still stands at 2.2% of the country as a whole. In addition, as the government continues to support the spread of xEVs, we believe there is still room for growth in EVs in Japan.

Given these circumstances, we have high expectations that the imported car market in 2024 will remain strong and exceed the previous year’s results for the second consecutive year.

4. Key activities of JAIA

●Activities for market revitalization, Activities related to the environment and energy

First, I would like to talk about JAIA’s xEV initiatives as activities that span two fields of market revitalization and the environment and energy. To further spread xEV, at JAIA, we are promoting our activities, not only (1) requesting activities to the government regarding subsidy systems, etc, but also (2) holding xEV promotion events, (3) improving the charging infrastructure by considering deregulation regarding charging voltage, etc., and (4) recycling of lithium-ion batteries.

First of all, we grateful for the government for continuing to seamlessly implement xEV purchase subsidy measures and for securing a large budget of 129.1 billion yen for the FY 2023 supplementary budget.

Next is our efforts to increase awareness of imported xEVs. JAIA has been working as a platform to promote the spread of imported xEVs since 2021. Last year, we held an event to promote the spread of imported xEVs in Kobe in July. And, at the Japan Mobility Show held from October 26th, though JAIA member companies also participated individually. JAIA secretaries also participated and set up a booth for the first time in 26 years since 1997. As a platform for xEV, in this booth nine companies related to charging infrastructure and three companies related to recycling participated. As part of the series of events to promote the spread of imported xEVs since 2021, by exhibiting a booth specializing in xEVs, and through exhibits that are conscious of xEV issues such as charging infrastructure and battery recycling as well as increased presence of imported XEVs, we successfully provided an opportunity for many people to learn about the conditions surrounding xEV.

JAIA also organized or gave nominal support the Mobility Show in Nagoya in November, in Osaka and Fukuoka in December, and in Sapporo in January. We will continue to strengthen cooperation with various regions.

JAIA is considering continuing to hold events to promote the spread of imported xEVs in FY 2024. To help the general public understand the appeal of imported xEVs as in the previous year, we are considering holding events that are conscious of social systems including charging infrastructure for electrification, which is an important issue for achieving carbon neutrality.

Towards carbon neutrality in 2050, we believe that it is important to develop new social systems, including charging infrastructure, surrounding xEVs over the medium to long term. JAIA will work with member importers to promote activities aimed at the future of electrification.

Next, I will talk about improving the charging infrastructure, such as considering deregulation of charging voltage, etc. JAIA believes that in addition to increasing the capacity of basic charging, route charging, and destination charging, it is necessary to further expand charging infrastructure, including quality and quantity.

In order to spread xEVs, it is necessary to have a charging infrastructure that is easy to use for everyone.
We recognize that charging infrastructure as an important issue. In an attempt to respond to a wide range of issues regarding charging infrastructure, we have set up a cross-sectional team within JAIA to proceed with the study. At the Study Group on Promotion of Charging Infrastructure Development established in June 2023 under the initiative of the METI, JAIA made four requests of: (1) higher output for ordinary chargers, (2) higher voltage/fast charging, (3) expressway-related. Subsequently, these points requested by JAIA were reflected in the roadmap for charging infrastructure towards 2030, which was formulated in October. I would like to express our gratitude to METI and other related organizations for their swift efforts. The start to discussion towards deregulation about important developments including the revision of JARI certification to apply subsidies to ordinary chargers up to 10kW and high-voltage etc. JAIA would like to work together to resolve these issues.

In particular, the current voltage regulations in Japan do not allow for high-voltage charging comparable to that in Europe and in the U.S. and some vehicles developed in Europe have had to develop and install voltage converters just for the Japanese market in order to match the low charging voltage to the high voltage battery of the vehicles. Therefore, there are major development issues such as cost and space for converter installation.

Regarding charging infrastructure on highways, we hope that the quality and quantity will be improved, and that charging will be faster, including high-voltage. In addition, to utilize charging infrastructure located near expressway facilities, we request that the temporary exit from expressways be institutionalized in a way that reduces the burden on charging companies. We look forward to the actions of related organizations.

Further, we are also closely monitoring developments in other countries as we consider high-voltage. According to the European Commission, there are already approximately 77,000 quick chargers installed in Europe as of the end of 2023, and more than half of these are capable of charging at 1,000V with an output of over 150kW. In Germany, high-voltage quick chargers like this are installed in the city area, so anyone can use it easily. If Japan were to make it possible for anyone to do quick charging at high-voltage anywhere as in Germany, charging times would become shorter and it is possible to make charging time shorter as users demand.

At the same time, it is necessary to create an environment that promotes the installation of chargers in public parking lots and apartment houses, as seen in the case of Tokyo Metropolitan Government. It is important to roll it out to other regions than Tokyo. We will be asking for the support of all concerned parties to promote the installation of chargers in existing apartments and mechanical parking lots.

In the recycling field, the Task Force on the Reuse and Recycling of Waste Lithium-ion Batteries, which has been active since the beginning of last year, not only collected overseas information such as the European battery regulations and domestic information such as the Japanese government’s moves, but also collected information on battery recycling businesses and exchanged opinions with recycling industry organizations, allowing to understand that recycling technology. In Europe, companies are proceeding with the installation of plants for battery recycling and reuse in accordance with the European battery regulations. We will continue to exchange opinions with our members and related industry organizations, and support the members by keeping up to date with the latest information in the industry, while appropriating recycling and reuse of lithium-ion batteries.

Next, I will explain our initiatives other than xEV. First, regarding the request for tax reform,
this year, JAIA will continue to push forward with requests for further reduction of the burden of excessive automobile-related taxes and for the simplification and fairness of the tax system. In particular, while we need to accelerate the spread of xEVs, which will contribute to achieving carbon neutrality, system reforms that would increase the burden on users should be avoided, and we will ask the government to consider tax reform to accelerate the spread of xEVs such as EVs, PHEVs, and FCVs.

In the environment and energy field, the FY 2030 fuel economy standards for passenger cars require a significant improvement of 44.3% on average fuel efficiency compared to the FY 2020 standards. JAIA would like to request to introduce flexible measures such as off-cycle credits and to evaluate energy-saving technologies that improve actual fuel efficiency and encourage their widespread use.

●Activities related to safety and harmonization of regulations

Next, I will explain the activities related to safety and harmonization of regulations to ensure the smooth introduction by JAIA member companies of state-of-art vehicles that are compatible with advances in technology.

First, in order to provide imported cars with safe and environmental performance to Japanese consumers without incurring additional costs, we have been working with relevant authorities for many years to harmonize international regulations and utilize the mutual recognition system based on the United Nations 1958 Agreement regarding certification systems. As a result, IWVTA, an international whole vehicle type approval system, was established in 2018.
Since then, IWVTA has been expanded year by year, including the addition of UN-R154 related to emissions, fuel consumption, and electric power consumption. It is now possible to obtain IWVTA, which includes type certification for major safety and environmental equipment of passenger cars. JAIA will continue to work to further promote international harmonization of vehicle laws and regulations through JASIC activities and others, and to realize an IWVTA that is completed and has high utility value as soon as possible.

In addition, regarding regulations related to other individual devices, a new United Nations regulation (UN-R168) regarding RDE regulations which are emission regulations when the vehicle is actually driven on the road is scheduled to take effect in March. JAIA welcomes that international harmonization of vehicle regulations is progressing steadily year by year. JAIA will continue to work to resolve remaining Japan’s unique requirements through international harmonization.

Furthermore, regarding certification procedures related to confirmation of compliance with regulations, in November last year, JAIA requested the Ministry of Land, Infrastructure, Transport and Tourism to further streamline certification application procedures based on IWVTA. JAIA hopes that procedures will be further streamlined while ensuring the safety and environmental performance of imported vehicles.

In addition, in order to ensure safety of connected cars, which is a trend in recent years, we will work to ensure that our members can respond appropriately to new regulations regarding cybersecurity/software updates for in-vehicle systems, in collaboration with OEMs in home countries and MLIT as appropriate.

Also, we recognize that the technological trend towards the realization of autonomous driving in the communication field in the near future is very important. JAIA established a specialized working group and discuss the issues. Also, we hold discussions with relevant organizations regarding frequencies and communication systems.

Regarding automated driving technology, we will continue to collect information on the Mobility DX Study Group, etc. Through these efforts, we will continue to contribute to providing our customers with a higher level of safety and convenience.

●Activities in the fields of automobile fair trade and after-sales, etc.

Next, I would like to explain our activities in the areas of automobile fair trade and after-sales.

Regarding automobile fair trade, JAIA actively participates in the Automobile Fair Trade Council working groups, as our activities aimed at thoroughly disseminating the Automobile Fair Competition Code to JAIA members and ensuring fair trade. We will continue to carry these activities.

In the after-sales field, we will take measures for the following: preparations for the electronic vehicle inspection system that utilizes the on-board diagnosis (OBD) system, which is scheduled to be applied to imported vehicles that have received type designation from October 2025; to ensure that each member company can respond appropriately, such as implementing recall-related procedures in compliance with laws and regulations.

Additionally, the lack of mechanic personnel has recently become an urgent issue common to the entire automobile industry. JAIA also established the Automotive Mechanic Human Resources Information Liaison Meeting in September 2022, and continued to share various information and carry out specific activities with member companies to overcome issues. The background to this issue, which the government has been working on since last year by launching a working group, is not just automobile mechanics, but also a society with a declining birthrate and a trend that young people are losing interested in cars. First of all, we must accept the reality. As a result of the activities at the liaison meeting, the members have also made progress, albeit little by little, in their efforts based on the information and activities shared through the liaison meeting.

As part of our activity policy, during events to promote the spread of imported xEVs that have been held by JAIA, we aimed to strengthen collaboration between automobile mechanic training schools and our members. We held round-table conferences among mechanic training schools, our members and affiliated dealers.

Based on the requests we have received so far from training schools, each of importers will carry out activities in collaboration with the training schools, providing opportunities training schools’ students and also middle and high school students, to have direct contact with vehicles from the perspective of “increasing the number of young people interested in imported cars”, JAIA will continue to support our members to make them more active. JAIA also supports our members in the recruitment and retention of foreign personnel.

In addition, we would like to proceed with PR activities such as building a special gate way web page to each of imported member companies of four- and two-wheelers’ website for promoting the attractiveness of imported vehicles maintenance to help young people understand the attractive imported vehicle’s mechanics in the JAIA official website next month.

●Motorcycle activities

Lastly, I would like to talk about the fifth pillar of our main activities, which is motorcycle-related activities.

The number of newly registered imported small motorcycles in 2023 increased by 2.8% to 27,008 units compared to 26,271 units the previous year, marking the fifth consecutive year of increase. The reason for this is that motorcycles becoming a means of transportation to avoid crowds during the corona pandemic, and touring camps, etc., which can be enjoyed alone while avoiding crowds. In addition, with the spread of SNS etc. of videos about motorcycles, celebrities whose hobbies are motorcycles, who had been kept in the shadows until now, are now appearing on TV. Motorcycles are becoming more familiar. Furthermore, we believe that this is due to the introduction of new models that can be ridden with a medium-sized motorcycle license, which has opened people’s eyes to the variety and uniqueness of imported motorcycles.

Now, one of the major pillars of our motorcycle activities is “to revitalize the market.” As part of this, we will hold an imported motorcycle test ride, which we held last year as well, at Oiso Long Beach on April 10 and 11, so please come and see us.

Additionally, the 3rd Nagoya Motorcycle Show is scheduled to be held at the Aichi International Exhibition Center from April 5th to 7th. At the Nagoya Motorcycle Show, admission is free for high school students and younger and for women, in an effort to expand the range of motorcycle enthusiasts. JAIA gave nominal support to this event last year and will continue to actively participate in similar projects in major cities.

Additionally, on September 8, 2023, eight motorcycle-related organizations including JAIA and the Ministry of Economy, Trade and Industry held the “11th Bike Love Forum in Shizuoka/Hamamatsu” in Hamamatsu City, Shizuoka Prefecture. In the panel discussion, the importance of legal compliance and the necessity of safe traffic education for high school students were discussed under the theme of “Traffic safety education required for young people in the future,” focusing on increasing demand among young people. It is scheduled to be held in Miyazaki Prefecture on September 27 2024.

JAIA is requesting the separation of expressway tolls for motorcycles, the expansion of motorcycle parking lots, and a review of the motorcycle license system.

While collaborating with other organizations centered around the Bike Love Forum, we made requests for the expressway toll classification and toll optimization at government and political parties’ motorcycle-related project team review meetings. As a result, as in the year before, from April 2023, road operators such as NEXCO East offered a “motorcycle flat rate discount” that reduced tolls at a fixed rate for motorcycles equipped with ETC that use expressways on Saturdays, Sundays, and holidays.

Regarding “activities for international harmonization of regulations,” which is another pillar of our motorcycle activities, we will continue to support our member importers.

This year as well, we will work to further spread imported motorcycles and revitalize the domestic motorcycle market by promoting a wide variety of unique and “attractive imported motorcycles” through JAIA motorcycle test ride events and other events.

5. Closing

JAIA member companies will continue to provide attractive imported cars with excellent environmental and safety performance. JAIA will cooperate with the Japanese government and all organizations involved in the automobile industry and sales market to reduce the burden on users and contribute to the realization of a carbon-neutral society.