Japan auto sales plunge as young lose interest
- Published Tuesday, December 30, 2008, by the Associated Press
Japan auto sales plunge as young lose interest
Auto sales plunge in Japan as young adults no longer dream of their
By Yuri Kageyama
AP Business Writer
TOKYO -- To get around the city, Yutaka Makino hops on his skateboard
or rides commuter trains. Does he dream of the day when he has his
own car? Not a chance.
Like many Japanese of his generation, the 28-year-old musician and
part-time maintenance worker says owning a car is more trouble than
it's worth, especially in a congested city where monthly parking runs
as much as 30,000 yen ($330), and gas costs $3.50 a gallon (about 100
yen a liter).
That kind of thinking -- which automakers here have dubbed "kuruma
banare," or "demotorization" -- is a U-turn from earlier generations
of Japanese who viewed car ownership as a status symbol. The trend is
worrying Japan's auto executives, who fear the nation's love affair
with the auto may be coming to an end.
"Young people's interest is shifting from cars to communication tools
like personal computers, mobile phones and services," said Yoichiro
Ichimaru, who oversees domestic sales at Toyota.
The Japan Automobile Manufacturers Association predicts auto sales
in Japan will fall to 4.86 million in 2009 -- the first time below
5 million in more than three decades. This year, sales are projected
at 5.11 million, the worst since 1980.
Vehicle sales peaked at 7.78 million vehicles in 1990 during the
nation's heyday "bubble" economy. After that burst, Japan was mired
in a decade-long slowdown, which squelched consumer spending and sent
car sales on a decline. A surge in gas prices, which has subsided in
recent weeks, also eroded sales.
"The changes in individuals' values on cars came cumulatively over
time," said Nissan Chief Operating Officer Toshiyuki Shiga. "The
change in young people's attitude toward cars didn't happen overnight.
So we have to keep convincing them cars are great."
In an effort to do just that, Nissan Motor Co. has dealerships
featuring colorful accessories for cars meant to appeal to Japanese
women's alleged penchant for "cute" things, and signed major league
star Ichiro for splashy TV ads for a new sporty model, among other
Toyota, the nation's biggest car maker, has hosted test-drive events,
taken part in fashion shows and even developed its own suburban
shopping mall that houses a dealership to reach out to buyers.
About half the autos produced in Japan are sold in Japan, while the
other half are exported. But the U.S. market -- where more profitable
models like light trucks tend to be popular -- is more lucrative.
Still, this nation's disenchantment with cars is cause for concern.
Americans, after all, are expected to start buying cars again --
eventually -- partly because of the inadequacy of mass transit there.
It's a different story in Japan's cities where streets are clogged but
trains are efficient. The domestic market also is shrinking due to a
drop in population.
Makino, the young man who plays what he calls "organic folk music," is
typical of the new breed who scoffs at the sportscar-idolizing culture
of the older generation.
He and his friends see cars as nothing more than a tool, much like a
vacuum cleaner, not a reflection of their identity, tastes or income
level. Makino's father own a car, but he has never owned one. And he
doesn't know a Honda Fit from a Toyota Vitz.
"I don't believe that having more things enriches you," Makino said in
a recent interview at his apartment, sitting among shelves of wooden
crates. "If you stay happy in your soul then you can be happy without
Companies like Toyota and Honda Motor Co., along with the electronics
giants like Sony Corp. and Panasonic Corp., are the mainstays of the
world's second-largest economy, and a hollowing out of manufacturing
would be lethal.
Manufacturing makes up a fifth of Japan's economy in gross domestic
product. But it makes up 90 percent of its exports, and any faltering
in that sector would send debilitating ripple effects throughout
Japan. And that's likely to further depress auto sales in Japan.
Unlike other industrialized nations, Japan lacks other sectors to
drive its economy such as financials and services. Consumer spending
makes up about 60 percent of Japan's GDP.
The damage to this nation's economy would be devastating if the auto
industry fails to turn itself around because so many jobs will be
affected -- not only directly at the plants but related ones such as
auto-parts makers, distributors and other jobs, including electronics
companies that make batteries and other products for the auto
Already, automakers here have shed thousands of jobs at plants, which
had been producing cars for export to the U.S. and other overseas
markets with a bigger thirst for autos. Toyota is projecting its first
operating loss in 70 years.
Some dealers are taking extraordinary steps to attract domestic
Motoharu Ishii has turned his Honda dealership into a special shop
for dog-owners. Bigger dogs can't travel in Japanese trains, and so
pet owners may be among the last holdouts in car ownership.
He helps them fit their vehicles with cages, offers discount coupons
at dog runs, and has a fuzzy mat ready for visiting pets -- in the
same way some dealers prepare play areas for children.
"We want out customers to stay even a bit longer in our showroom,"
he said, adding that although sales haven't shot up he has managed
to prevent drastic drops. "The last thing you want is a deserted
showroom. If it looks busy, it makes it easier for people to drop by."