Nissan and Mitsubishi today presented their jointly developed, but separately badged and marketed kei car to an amazingly large contingent of the Japanese press. TTAC readers are quite familiar with the car(s). They have watched the Nissan DAYZ and its Mitsubishi siblings, the eK Wagon and eK Custom on its first day of production at Mitsubishi’s plant in Mizushima, near Hiroshima, more than two weeks ago. Today, the car arrived in Tokyo.
In an overall weak Japanese market, there are two segments that show resiliency, and that’s kei cars and imports. While sales of regular vehicles in Japan are down nearly 11 percent in the first 5 months, sales of minivehicles decreased only 1.7 percent in the same period. Sales of imported cars were up 24.8 in May, its 11 straight month of increase, the Japan Automobile Importers Association said today. For the year, imports are up 13.2 percent.
This flies in the faces of some voices in Detroit, which insist that kei cars are just another sign of a closed Japanese car market that makes imports impossible, and that keis must go. The facts say otherwise, but these particular Detroit voices are amazingly fact-resistant. It is true that kei cars have a growing 40 percent share of the Japanese market, and foreign makers have none of this pie. Not because they are locked out, however.
Nothing keeps a foreign automaker from offering a car in Japan that is not more than 11.2 ft long, no more than 4.9 ft wide, that has an engine displacement not over 660 cc, and provides not more than 63 hp, thereby qualifying as a kei car. Daimler once sold a Smart ForTwo as a Smart K in Japan. It turned into the worst selling kei car – a kei is basic, low-cost transportation, something the Smart was not. Those small cars need tiny prices. The Nissan DAYZ starts at $10,000, fully loaded it costs $15,600, incl. tax.
Foreigners would be nuts to target the small car market that barely is big enough for Japanese makers who had been in it since MacArthur packed moving boxes at the Dai-Ichi Building. There is a reason why Nissan and Mitsubishi are in this small car together.
Despite their success in Japan, keis are mostly unsalable elsewhere. They are widely regarded as underpowered and made for skinny Japanese bodies. Development costs must be amortized over as many units as possible, and a kei car simply cannot reach the global unit sales of a regular car.
In this video, the always elegant former Time Magazine reporter Coco Masters, now displaced to Nissan in Yokohama, looks into the kei car market and asks Nissan COO Toshiyuki Shiga if and when keis will be sold elsewhere. Watch Shiga make a comment about the small cars not being wide bodied enough for the wider bodies of overseas customers.
Something I had to put to the test immediately.
Only for skinny Japanese? Not true at all!