There’s nothing like it in the automotive world. Picture this: With more than 1,500 invited members of Japan’s automotive industry, you’re entering the largest ballroom in the country’s most prestigious hotel – the Hotel Okura – and waiting to greet you are the presidents of all of Japan’s major automakers.
Like soccer players lining up before a big match to sing their national anthems, CEOs from Nissan, Toyota, Honda, Mazda, Mitsubishi, Subaru, Daihatsu, and Suzuki lined up to bow and network with hundreds of industry types on the first work day of 2011 after the long New Year’s holiday break. The occasion? The Japan Automobile Manufacturers’ Association’s (JAMA) New Year’s gathering. The reason for staging it? So that industry types, government ministers, and media get together, press the flesh, and set the mood for the year.
And what’s the mood for 2011? Well, if it has anything to do with comments made by the head of the Tokyo Stock Exchange on its first trading day of the year, the country is through the worst of its recession and is poised to “bounce” back—2011 is the Year of the Rabbit. A look into the history books shows that Japan traditionally rebounds strongly in rabbit years, and a rally to boost the country’s Nikkei stock exchange at the end of the first day indicated that there might just be something to the age-old theory.
Nissan CEO Toshiyuki Shiga took the stage to open the party, and struck a cautiously positive tone when he said the country has to consolidate its industry-leading hybrid and electric vehicle position, and that this would come from total investment in R&D across all of Japan’s carmakers in 2011 of 2 trillion yen, or around $24.3 billion. Toyota is expected to account for around one-third of the total estimated amount. “JAMA’s members must also act to resist yen appreciation,” he stressed.
Several minutes later on the ballroom floor, Toyota CEO Akio Toyoda reinforced Shiga’s statement. “To maintain Japan’s manufacturing expertise and job security, the yen must depreciate and trade at around 90 yen to the U.S. dollar. The current 82 yen-to-dollar rate is too strong. And the Nikkei needs to trade at 13,000 yen.”
To maintain a competitive cost structure, Mitsubishi managing director Gayu Uesugi said we could expect to see a new vehicle starting production in Thailand in 2012, following Nissan’s transfer of Micra manufacturing bases to Thailand and India.
The government is pitching in, too. Trade and industry minister Akihiro Ohata told the gathering that his administration has set aside roughly $350 million as a “grant pool” to assist buyers of electric cars and plug-in hybrids as they come onto the market in 2011.
As I listened to the minister’s comments, I couldn’t help but be reminded of the response that Japanese astronaut Mamoru Mouri got from a bunch of primary school kids when he queried them on the environment. “You all like cars, right? And you all want to drive when you grow up? But did you know that millions of kids in China and India have the same dream? And you are aware that we have a very serious environmental problem that is partly caused by cars and trucks, right? So what can we do to clean up the air?” he questioned. He was not the only one surprised when more than half replied, “We don’t have to use them very much,” while the remainder blurted, “We can drive EVs.” Could this be where the car industry is ultimately headed? And if it does, will the industry ever be able to meet the demand? There’s a topic for the next year’s party.
Posted by : Peter Lyon
