Chairman’s Press Conference, January 2020

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Chairman's Press Conference January 27, 2020

Kintaro Ueno

1. Introduction

First of all, I would be remiss not to say that last year made us all reminded of the importance of disaster prevention, as Typhoon Hagibis and other large-scale disasters caused significant damage in various parts of the country. Our prayers go out to all those who lost their lives and our thoughts are with everyone who has been affected. It is my sincere hope that the regions affected are able to recover and rebuild as quickly as possible.

This year represents the start of a new decade, the 2020s, and for the automobile industry, the year is expected to bring further acceleration in “CASE”.
In countries around the world, levels of automated driving are expected to be raised, and with the ongoing advance of IoT, connected technologies are expected to proliferate in the automobile sector as well. Further progress is also anticipated in the establishment of international regulations for automated driving at various international fora like the United Nations. In Japan as well, new regulations are being planned to be enforced for making Level 3 automated driving possible by the Tokyo Olympics and Paralympics, and various field operational tests will also take place. JAIA is convinced that it is extremely important for such new regulations to be developed in harmony with the international regulations related to autonomous driving.
In addition, based on the Paris Agreement, Japan, the EU and many other nations, along with various subnational and non-state actors like states, cities and corporations, have set determined contribution targets and already commenced initiatives to achieve them. This year, these initiatives are expected to be further strengthened.
In the automobile sector as well, the EU, in spring of last year, decided an ambitious CO2 reduction target for passenger cars by 2030, and Japan, also in June of last year, established an ambitious target for improving passenger car fuel efficiency standards by the fiscal year 2030. With electrification demand rising in countries around the world, JAIA will further carry out our activities to promote Electric Vehicles while cooperating with the government, which has an important role to play in developing the required charging infrastructure among other things.

2. New imported vehicle sales in 2019

Sales of foreign-branded, four-wheel vehicles in 2019 totaled 299,439 units, which was nearly 300,000 units and the 5th highest level ever. Overall annual imported vehicles sales, including Japanese-branded vehicles, totaled 348,316 units.
Looking back the last 12 months’ sales of new foreign-brand four-wheel vehicles, although adversely affected by the landing of ravaging typhoons in October, new foreign-brand imported vehicle market remained firm throughout the rest of months last year. The reasonably firm new foreign-brand imported vehicle market in 2019 was mainly because JAIA member companies launched new models with advanced safety and environmental technologies throughout the year and expanded their power train lineups as well as further provided various models to meet the diverse lifestyle needs of consumers.

3. Outlook for new imported vehicle sales in 2020

This year, JAIA member companies will even more actively launch on the market new models with a broad range of cutting-edge safety and environmental technologies. Also, with the impending start of 5G service, JAIA members plan to meet consumer expectations for connected vehicles by expanding their lineups of models with AI and communication technologies. Furthermore, JAIA members plan to advance electrification with more new Electric and Hybrid Vehicles as well as to expand more lineups of SUV, crossover and other models. In addition, various kinds of JAIA members’ financing-based purchase support programs and government incentive programs are expected to broaden consumers’ choice.
Considering the above-mentioned positive factors, the expected sales of new foreign-brand four-wheel vehicles in 2020 will be well above 300,000 units.

4. JAIA’s key activities

4.1 Activities for revitalizing the vehicle market

First, with a view to revitalize the vehicle market, JAIA plans to further request for user-oriented tax reforms to lower the tax burden and promote greater simplicity and fairness. In addition, in order to ensure fair markets, we will also actively participate in the meetings at relevant organizations like the Automobile Fair Trade Council.

4.2 Activities in environmental and technical fields

Looking first at activities for promoting electrification, global warming is a major challenge for the auto industry as well. To achieve the ambitious fuel efficiency target established last year by the Japanese government for the fiscal year 2030, each company will be obligated to improve corporate average of fuel efficiency by 44.3% compared to the fiscal year 2020 levels. JAIA members consider this challenge an opportunity and plan to make even greater efforts to steadily expand their lineups of “Clean Energy Vehicles” with excellent environmental performance and cutting-edge technologies for high-efficiency reduction of CO2 emissions, including Electric Vehicles (BEV, PHEV, FCV) and Hybrid Vehicles. Along with these proactive initiatives from member companies, in order to achieve the ambitious target set for passenger car fuel efficiency by the fiscal year 2030, it will be necessary for the government to strengthen its promotion of Electric Vehicles through further development of the charging infrastructure and its support through various programs, such as an off-cycle credit program like the one already instituted in Europe and USA.

Second, I will introduce JAIA’s activity plans related to raising the level of automated driving.
In order to make Level 3 automated driving a reality on expressways and Level 4 in special areas, the Japanese government plans to establish concrete regulations ahead of this summer’s Tokyo Olympics and Paralympics based on revisions to the Road Traffic Act and Road Transport Vehicle Act in May of last year. JAIA has already confirmed with the Ministry of Land, Infrastructure, Transport and Tourism (MLIT) on the absolute need for Japan’s new regulations to be harmonized with international regulations. We will continue to confirm with the MLIT that when specific requirements and standards are established related to automatic operation equipment and certification methods, etc. by this summer they should be internationally harmonized in line with discussions at the World Forum for the Harmonization of Vehicle Regulations (WP29). In addition, SIP-adus, a government-industry-academia partnership, will continue conducting phase 2 of Field Operational Test (FOT) for automated driving systems this year, and JAIA members will also participate in phase 2 of the FOT to further social acceptance of autonomous driving. In this way, JAIA will work hard to raise autonomous driving levels and further contribute to the achievement of zero accidents, one of the ultimate goals for autonomous driving.

Over the past few years, traffic accidents caused by elderly drivers have become a serious social problem in Japan, and JAIA firmly believes that safety should always be prioritized in everything. JAIA member companies plan this year, to even more actively provide more consumers with models equipped with a wide range of advanced safety technologies and functions for the sake of all vehicle users, including elderly drivers by using various incentives including newly introduced “Safety Support Car Subsidy”. Moreover, JAIA will deepen its cooperation with the National Police Agency and other relevant ministries in connection with comprehensive traffic safety measures for elderly drivers.

I would like to reiterate how important international harmonization of vehicle-related regulations and programs will be in the 2020s in light of the expected further development of borderless world. For example, the UN Regulation on Advanced Emergency Braking Systems (AEBS) for passenger vehicles has just come into effect this year on January 22, and Japan is planning to set the timing to make installation of AEBS mandatory. In parallel in December of last year, the EU revealed the planned timing to make it mandatory in its new General Safety Regulation (GSR). I would like to reconfirm that international harmonization will be extremely important not only with respect to the scope of what will be made mandatory in Japan but also with respect to its timing.

In addition, while regulations unique to Japan have decreased as a result of international cooperation for harmonization of vehicle regulations over many years, JAIA plans to redouble its efforts, in cooperation with responsible ministries and relevant organizations, aiming to establish complete International Whole Vehicle Type Approval (IWVTA).

4.3 Activities for imported motorcycles

This year, JAIA will further carry out motorcycle activities with the two wheels of activities for market revitalization and international harmonization of safety and environmental regulations.
First, this spring, on April 2nd and 3rd, we plan to hold the 6th JAIA Motorcycle Test Ride. For media members participating, it will be an excellent opportunity to ride the latest models from our member companies and experience the appeal of imported motorcycles, the “something different” they possess. Intensive preparations are currently underway. We will be inviting media members as soon as plans are finalized, so we hope to see you there.
The Bike Love Forum (“BLF”) has been held by JAIA and other motorcycle-related organizations since 2013. This year, the eighth forum is slated to be held in Osaka in the fall, and JAIA will be an active participant.
In addition, the first ever Nagoya Motorcycle Show will be held at International Exhibition Center in Aichi Prefecture over three days this year from April 10 to April 12. JAIA members plan to exhibit motorcycles and participate in the test ride event. This first Nagoya Motorcycle Show is a golden opportunity for riders of many ages to experience the appeal of the diverse range of imported motorcycles, so please do not miss it.
Additionally, JAIA will strengthen our activities, aiming at further international harmonization of regulations related to motorcycle lamps, noise and exhaust gas.

5. Conclusion

To conclude, this year, the first of the 2020s, all JAIA members see such a historic big turning point symbolized by “CASE” as an opportunity and will further provide environmentally friendly automobiles equipped with cutting-edge safety and connected technologies as well as various attractive motorcycles to consumers across the country.