JAIA Chairman’s Press Conference Speech, January 2023

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Chairman's Press Conference January 30, 2023

Mr. Kintaro Ueno

1. Opening remarks

This is the third time I serve as the chairman of JAIA, following 2013 and 2018. In particular, with the growing momentum to achieve carbon neutrality, JAIA member companies intend to deliver to Japanese customers a wide variety of imported vehicles from around the world, including electrified vehicles, equipped with cutting-edge safety and environmental technologies. We will take on the challenge of resolving new issues accompanying technological development so that our members can do what they intend to do. On the other hand, the situation in Ukraine since last year and the shortage of semiconductors have continued to affect the supply of automobiles, causing trouble for our customers and I have been appointed in the midst of such circumstances. I am once again determined to take on that responsibility.

The automotive industry is also facing adverse effects of rising prices and supply-side constraints, but by delivering various attractive imported cars to Japanese customers, we will spare no effort to revitalize the Japanese automobile market and contribute to the development of a sustainable mobility society in Japan. We look forward to the continued support of the government in this regard.

2. Looking back on imported vehicle sales in 2022

Last year, due to the shortage of semiconductors and delays in the supply of other parts, the total number of registered vehicles sold decreased to about 2.56 million units. Sales of foreign-brand vehicles continued to be tough from January to September, and although there were signs of recovery in October onwards, the sales for the entire year were 242,226 units, down 6.7% from the previous year. However, the share of foreign brands to the overall registered vehicles was 9.5%, the highest since the statistics began in 1988.

Of these, I think that 2022 was a memorable year when the number of imported-brand BEVs sold exceeded 10,000 units for the first time at 14,341 units. We believe that this is a result of subsidy measures and our member companies expanding their lineup of BEVs to 78 models of 15 brands in total, so that they can meet the needs of their customers. Comparing to the number of imported-brand BEVs sold in 2021, which was 8,610 units, the 2022 figure represents an increase of 66.6%, resulting in imported brands accounting for 45.3% of all BEV passenger cars sold in Japan.

3. 2023 outlook on import car sales

Next, I would like to talk about the outlook for imported car sales this year, in the 2023 Tax Reform Outline, it was announced, among others, that in consideration of the current situation, the Eco-car Tax Incentives and the Automobile Tax Environmental Performance Levy would remain unchanged until the end of 2023, and the ongoing preferential measures for xEV, etc., for the upcoming three years. These measures were decided based on the requests of the industry including JAIA and, and we welcome them.

In addition, looking at domestic consumption trends from a broad perspective, for example, we can see that there is a strong desire to spend on traveling thanks to the nationwide travel support, etc., and for the imported car industry, we believe that this consumer trend will be a tailwind.

Especially for xEVs, we expect continued support from the government for electrified vehicles such as subsidies and tax incentives, and we expect that their sales will increase further as our member companies actively introduce xEV models to the Japanese market. For example, in Germany, the share in sales of BEVs and PHEVs in 2017 was around 1%, but thanks to government subsidies and expanded lineups of xEV models, it grew to 26% in 2021. So, I think there is still room for growth in the Japanese market.

JAIA will communicate to customers the appeal of xEVs, such as the longer cruising range, and provide customers with wide lineups, while holding events and the like to make customers feel more familiar with xEVs. We believe that it is vital to put in place the right conditions for xEVs, including charging infrastructure, with the support of the government, such as continuous purchase subsidies with no interruptions widely for every lineup.

We expect that the steady growth of xEV sales will further invigorate the market, and that the overall sales volume of imported cars will approach the pre-corona level.

4. Key activities of JAIA

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

I would like to introduce JAIA’s activities in the fields of market revitalization, and the environment and energy. First is our xEV initiatives that span across these two fields.

First of all, we would like to thank the government for the continued and seamless implementation of the measures to subsidize the purchase of electrified vehicles. As I mentioned earlier, thanks to the subsidies, the sales of imported-brand BEVs topped 10,000 units for the first time, at 14,341 units.

Under these circumstances, JAIA has been working as a platform to promote the spread of imported xEVs since 2021. In November, we held the “Import-brand xEV Test Ride Event” with 31 vehicles from 11 brands exhibiting so that the media reps could experience the appeal of imported xEVs. Also at the test-ride event, 3 companies exhibited motorcycles of 4 brands, charging-related companies and local governments participated in booth exhibitions, and round-table talks were held between the member importers and dealers and the automobile vocational schools that train auto mechanics. We held the event to raise awareness of the issues related to electrification. This year as well, we will be considering organizing events by incorporating new approaches to raises awareness of xEVs and the issues related to electrification.

For the spread of xEVs, it is essential to develop charging infrastructure that is easy for anyone to use. We are asking the organizations concerned for further enhancement of support measures for subsidizing chargers installed in commercial facilities including car dealers, enhancement of basic charging facilities for apartment and detached houses and public charging facilities around residential areas to supplement them, and support for charger installations in public roads, etc.

In addition, in response to technological progress, we will be requesting that the conditions for charging infrastructure be improved, such as considering deregulation related to such issues as charging voltage to shorten the charging time with fast chargers. Since the systems in Japan differ from that those of other countries, JAIA will work to resolve issues while cooperating with relevant ministries, mainly in our Task Force.

In the field of auto recycling, we will support our member companies in appropriately performing the recovery of onboard batteries. Launching a task force on recycling and reuse of lithium-ion batteries at the beginning of this year, and while referring to overseas information such as the European battery regulations and domestic information such as the moves of the Japanese government, we will proceed with examinations for appropriate battery recycling and reuse.

Continuing on, regarding the requests for tax reform, JAIA will continue to carry out request activities for further reduction of the excessive burden of auto-related taxes and ensuring the simplification and fairness of the tax system. In particular, until the spread of electrified vehicles in the Japanese market is sufficiently on track and reaches a level equivalent to that of other countries in accordance with the carbon neutral policies, we will ask the government for your continued support to ensure that all xEVs receive preferential tax treatment.

Furthermore, as an initiative to revitalize the market, we will hold the annual “42nd Imported Car Test Ride Event” from tomorrow, where you can experience the appeal of imported cars including xEV models. Please come by all means.
Let me also present other initiatives in the environment and energy fields than those for xEVs.

Regarding the fuel efficiency standards, the 2030 fuel efficiency standards for passenger cars require a significant 44.3% improvement in average fuel efficiency compared to the 2020 standards. JAIA will request the introduction of flexible measures such as off-cycle credits to evaluate energy-saving technologies that improve actual fuel efficiency and encourage their spread.

●Activities related to safety and harmonization of regulations

Next, I’d like to talk about our activities related to safety and harmonization of regulations so that the member companies can smoothly introduce to the Japanese market advanced automobiles equipped with the technologies that continue evolving day by day.

First, in order to provide Japanese consumers with imported cars equipped with the safety and environmental performance without additional costs, we have long worked with the relevant authorities to harmonize regulations and establish certification systems based on the United Nations 1958 Agreement that allows mutual recognition of approvals. As a result, in 2018, the IWVTA was established, as an international vehicle type approval system for whole vehicles.

In addition to safety-related devices that were already subject to IWVTA, in 2022, as JAIA requested, UN-R154 related to emissions and fuel/electricity consumption was added to the IWVTA elements, making a great leap forward to a full IWVTA for passenger cars. JAIA will continue to work toward the realization of a more complete IWVTA through such activities as further promoting international harmonization of vehicle regulations.

For the other aspects of safety technologies, at the WP29 (World Forum for Harmonization of Vehicle Regulations) held in November 2022, a new draft UN regulation was agreed to replace Japan’s unique regulations for immediate front/left visibility, which is expected to be enacted in June 2023. JAIA will continue its activities such as requesting the government to support JAIA as necessary so that the remaining Japan-unique regulations will be eliminated by international harmonization through JASIC activities, etc. In addition, our member companies will gradually expand the number of vehicles equipped with high-performance AEBS for intersections, etc., lane keeping/departure prevention systems, and high-performance headlights.

Furthermore, from July 2023, regulations for cyber security (CS) and software updates (SU) for in-vehicle systems, which will become increasingly important for ensuring the safety of connected cars, etc., will be applied to imported cars in earnest. Through dialogue with MLIT, we will aim for rational and efficient operation of the new CS/SU regulations. JAIA member companies will meet these regulations properly, cooperating with each OEMs.

By launching a task force relating to communications within JAIA in 2021, we also worked to understand trends in telecommunication equipment installed inside and outside automobiles and communication infrastructure. Regarding elemental technology related to advanced safe driving support technology added to the subsidy from FY2022, we will request to expand the scope of subsidies and that subsidies be widely applied to advanced technologies that achieve the same objectives. At the same time, we will share information and collaborate with METI on the various technologies of imported vehicles.

Regarding automated driving technology, we will continue to collect information on the Automated Driving Business Study Group and SIP-adus and its successor programs.

While promoting such initiatives, we would like to contribute to the provision of greater safety and convenience to our customers.

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

Next, I’d like to talk about our activities in the fields of automobile fair trade and after-sales, etc.

Regarding automobile fair trade, JAIA actively participates in the working group of the Automobile Fair Trade Council, continuing to promote activities aimed at thoroughly disseminating the Automobile Fair Competition Code among the JAIA members and ensuring fair trade.

In the after-sales field as well, JAIA has been working on the electronic vehicle inspection certificate introduced in January this year, new trends accompanying the development of connected technology, vehicle inspection systems that utilize on-board diagnosis systems, and recall-related procedures. In the after-sales field, we will ensure that member companies comply with laws/regulations and respond appropriately.

In recent years, the shortage of mechanic personnel has become an even more pressing issue shared by the auto industry as a whole. In September last year, JAIA set up a liaison committee for information on auto mechanic HR, commencing specific activities in five areas: “approaching the government on institutional aspects”; “facilitating collaboration between JAIA members/dealers and automobile vocational schools/colleges”; “Sharing best practices at dealers, etc.”; “Considering the use of foreign-national human resources”; and, “providing information on the use of subsidies for service shops, etc”.

At the xEV test ride event held on November 25 last year, in order to strengthen the cooperation between the automobile vocational schools/colleges and member companies, in addition to the round-table talks between the schools and members/dealers as mentioned earlier, we also set up an opportunity for school instructors and students to hear directly from the importers about the appeal of the latest electrified vehicles. Also, the lectures were well received by the instructors, who commented, “Students began to talk specifically about jobs after actually seeing the vehicles.”

In the five areas of activity I mentioned earlier, we will be taking more specific steps in the future. Some of the liaison committee members also expressed their desire to move forward with the utilization of foreign-national human resources, for example. While understanding the current situation and various systems, we would like to proceed with the activities that can lead to securing and retention of mechanic personnel.

●Motorcycle activities

Finally, I would like to introduce our activities related to motorcycles.

First of all, this year, we have welcomed “PCI Co., Ltd.” as a new member of JAIA Motorcycle. JAIA Motorcycle started with 5 members in 2010, and this year in 2023, we have 12 companies as members.

Now, regarding the imported small motorcycle market, the number of new registrations in 2022 was 26,271 units, which is an increase of 13.9% compared to 23,073 units in 2021, marking the fourth consecutive year of positive growth. I think it’s because, due to the impact of the ongoing corona crisis, people turned their attention to a wide variety of unique imported motorcycles that are suited for hobbies as a means of transportation that can avoid the 3Cs and as a way of playing that does not create closed places. In addition, we expect that sales will continue to be strong this year, centered on highly hobbyist vehicles and new models.

Next is about motorcycle activities. The first of the two major pillars is “activities for market revitalization.” First, regarding the promotion of imported motorcycles, we held the 7th imported motorcycle test ride event in April last year. We were able to convey the appeal of 88 imported motorcycles from 10 companies while taking maximize measures possible to minimize the impact of Covid-19, not to mention safety measures. As in last year, we are planning to hold a test ride event in April this year, and we are looking forward to your visit. In addition, electric motorcycles were exhibited at the JAIA imported-brand xEV promotion event in Osaka held in June last year and the JAIA imported-brand xEV test ride event in Tokyo in November, promoting not only four-wheeler xEVs but also electric motorcycles.

Furthermore, the 1st Nagoya Motorcycle Show was held in April last year, for which JAIA provided nominal support, and 7 JAIA motorcycle member companies exhibited in the event. JAIA will continue to actively participate in similar projects to be held in major cities in an attempt to promote carbon neutral initiatives.

Next, regarding motorcycle policies, JAIA promotes various request activities in cooperation with other organizations concerned through the BLF (Bike Love Forum). Three main requests are: (1) reduction of expressway tolls, (2) streamlining of the license system, and (3) construction and upgrading of motorcycle parking lots.

First, regarding the reduction of expressway tolls, as actions for independent toll category and appropriate toll pricing, in addition to the fixed discount “Touring Plan” that has been implemented since 2017, in 2022, a “fixed rate discount for motorcycles” by which the toll is discounted at a fixed rate when the travel distance exceeds 100 km was implemented for the first time. We certainly welcome the fixed-rate discount, but since the fixed rate discount was limited to the period and conditions, as a member of the motorcycle industry, we will continue to seek a permanent reduction in highway tolls.

Furthermore, regarding request activities for motorcycle parking lot expansion, in March of last year, the National Police Agency issued a notice concerning the expansion of parking lots and the review of regulations on parking violations in consideration of motorcycles. Also, the Tokyo Met Government set up motorcycle parking lots at such Tokyo government facilities as the International Forum, among other moves. JAIA welcomes such moves, and will continue to work with other organizations to make requests regarding the parking lots for motorcycles.

Regarding the other pillar of our motorcycle activities, “Activities to promote international harmonization of environmental regulations and improve the efficiency of certification systems”, as a result of our efforts to resolve issues while gathering information, such as improving the method of measurement of the acceleration noise of electric motorcycles, etc., with the support of the ministries concerned, we were able to find solutions, which is expected to lead to more introductions of electric motorcycles in the Japanese market.

This year as well, through the JAIA Motorcycle Test Ride Event, the Nagoya Motorcycle Show and the like, we will promote the further spread of imported motorcycles and revitalize the domestic motorcycle market by promoting a wide variety of unique “attractive imported motorcycles.”

5. Closing

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