Was it luck? Was it hard work? A mixture of both? After escaping a near collision with fate in Iwaki, and not even getting its feet wet in Thailand, Nissan emerges as the most successful after the trials brought on by the unholy triad of tsunami, flood and yen. We said this a while ago when we compared 2011 production numbers of Japan’s majors.

Today, we go to Yokohama to check the balance sheets.

In the most unceremonious way, Japan’s second largest automaker Nissan today stands out as the country’s most profitable. On the 8^th floor of Nissan’s glitzy building by the Yokohama waterfront, there is no arm-waving Carlos Ghosn today who fills the room with French-accented quotables. In his stead, Nissan fields a nondescript Nissan’s Corporate Vice President, Joji Tagawa, to present thgwe quarterly results.

The bespectacled  VP with chin fuzz and spiky hair rattles off words and numbers as if his life would depend on the speed of their delivery. It does not matter: The numbers could have been delivered by a silent nun, they still would have conveyed their punch:

Both in the October-December quarter, and also in its guidance for the results of the fiscal year which ends on March 31^st, Nissan trounced Honda and Toyota. October-December, Nissan’s  operating profit was 118.1 billion yen ($1.54 billion). Net profit amounted to 82.67 billion yen ($1.07 billion.)  Even better, Nissan sticks with its profit forecast for the fiscal that calls for a net profit of 290 billion yen ($3.8 billion).

Post water torture, Nissan appears to be in the best shape of all.

While Toyota and Honda had to scrounge for cars and parts, and still are supply constrained to some extent, Nissan rebounded quickly and gained market share around the world. Toyota lost 240,000 cars to the Thai flood, Honda’s plant in Thailand was submerged for months and is a near total write-off. And Nissan? Only 33,000 units went down the drain.

Now, let’s see whether they can keep it up.

Toyota  U.S.A., Inc. today announced  pricing for the 2012 Prius c subcompact hybrid. They were not kidding when they had promised that the car would start at below $19,000.

The base version can be had for $18,950. For those who want something more dignified, the Prius c will be available in four grades, all the way up to  $23,230  MSRP.

The miserly 53mpg (city) hatchback is promised to arrive at Toyota dealerships in March 2012.  For more information …

As the man said: “Finally, we can exercise our capabilities in earnest.”

Today, I heard at Toyota’s October-December results conference that TMC lost 240,000 unmade (and some made) cars to the Thai flood. After the conference, I asked Toyota spokesman Dion Corbett how many cars Toyota had lost to the tsunami.

I expected a bit less than a million. To my surprise, Corbett said: “150,000.”

I could not believe it. And I spent the rest of the day twisting arms until I knew how that happened.

Units lost to tsunami

Units lost to Thai flood

These tables, in their boring Excel self, are a document of resilience, they prove that world events often defy logic, and can destroy the best laid plans.

In June 2011, three months after the March 11 tsunami, Toyota was scrambling for parts. The company projected that it would lose 800,000 units by the end of June, and maybe produce 350,000 more than planned in the months before March 2012, to end the fiscal with a shortfall of 450,000 units.

In the line below, you see what really happened. By the end of June, the shortfall stood at only 760,000. The company could restart production faster than thought, could make 120,000 more cars than planned before October 2011, and then was able to accelerate production to produce 490,000 units over plan before the end of the fiscal year. Result: Only 150,000 units below plan.

Then, the Thai flood ruined the best laid plans.

In December, it looked like 260,000 cars would be lost to the Thai flood, and 30,000 could be made more before the end of the fiscal.

No miracle this time.

By the end of the fiscal, Toyota will have made a total of 390,000 cars below plan, and will be hit worse by a flood that many perceived as a side-show. Of course, this has everything to do with the fact that the flood fell into the later part of the year. But such is life when the year ends and one has to look at the bottom line.

Speaking of the bottom line, my contacts tell me that the financial losses caused by the tsunami were greater

Today, Toyota announced its October-December 2011 results to reporters packed into its basement meeting room in Koraku-en, Tokyo. Like most Japanese companies, Toyota is on a fiscal year that spans from April to March the following year. The reporting quarter was the third of the 2012 fiscal. It was surprisingly good. From October to December, TMC had an operating profit of 149.7 billion yen ($1.95 billion,) up 51 percent to from a year earlier. It gets better …

First, the room has to endure a speech that must have been written in Excel, rattled off by Toyota’s Senior Managing Officer Takahiko Ijichi (right.)

His Managing Officer Shigeru Hayakawa must have read the speech before. He uses the time to nod off concentrate intently. High suspense: We hear complaints that the government had taken a bigger bite of that profit due to “tax reform,” slashing the net profit to 80.9 billion yen.

Hayakawa-san continues to listen intently. We hear that when the fiscal ends on March 31, TMC will likely have an operating profit of 270 billion yen ($3.5 billion), and a net profit of 200 billion yen ($2.6 billion.) “The other guys are doing much worse,” whispers a reporter next to me. Indeed, today the Nikkei dips on announcements that other Japanese companies will report rotten numbers three months from now.  Less than a year ago, large parts of the country were smashed to bits, what do you expect? I definitely expected losses.

What really puts a fire under the room`s imagination is when Ijichi talks about how resolutely Toyota has been and is digging itself out if the triple whammy caused by the Tohoku tsunami, the Thai flood, and the towering yen.

Suddenly, what had sounded like an ambitious plan, namely that Toyota wants to raise its 2012 global sales by a whopping 21 percent to 9.6 million, begins to sound believable.

For 2012, Ijichi cites projections of the Japanese Auto Manufacturers Association JAMA that put the total Japanese market at 5 million this year. He thinks that it is not unreasonable when “we expect our market to be 1.63 million units including minivehicles.” For the Toyota/Lexus brand alone.

In the U.S., Toyota conservatively projects the total market to be 13.6 million, and, says Ijichi, considering that “we are going to introduce 19 models this year, we are planning to sell 1.9 million units in the North American market.”

Intentional slip of the tongue to hedge his bets? Toyota sold 1.64 million cars in the U.S. alone in 2011, after 1.76 million the year before. Together with Canada and Mexico, Toyota was pretty close to 1.9 million units last year in North America.

Europe is difficult to forecast, says Ijichi. But he aims to lift China from 880,000 units last year “to at least one million units … or more than that.”

Edmunds noted yesterday that “Toyota is still faced with supply issues; it averaged 33 days to turn in the last quarter, which is about half of the industry ideal of 60 days to turn.” Contacts at Toyota confirm this and say it will last through this quarter. After March, all dealers are expected to be fully stocked.

Hayakawa-san is wide awake when the usually dry and buttoned-up Ijichi takes a deep breath and declares in closing:

“In the past several years, our marketing people and our production people had encountered many hardships. They could not produce as they wanted and they could not sell as they wanted. Next year, finally we can exercise our capabilities in earnest.”

Mind, you, in Toyota’s calendar, “next year” begins this April.

A few days ago, 24/7 Wall Street published yet another list of the best selling cars of all times, kicking the perennial Ford F-Series to second place. We usually stay away from these lists, they just produce flame wars, especially when the methodology remains as dubious as in “we looked at best-selling car data from a number of sources.”

However, powered by the Huffington Post et al, the list went viral. And there you have it: “Toyota Corolla becomes world’s most popular car with one sold every 40 seconds.”

Toyota took that to heart today and added a second shift to its Blue Springs, Mississippi plant. It makes the Corolla in America. And yes, in the press release, Toyota confirms that the Corolla is “the world’s best-selling car of all time.”

The Blue Springs plant has an annual capacity to produce 150,000 Corollas. According to our monthly sales snapshot, the Corolla disappointed in January, whereas the new Camry is selling well. In 2011, Corolla U.S. sales had been down 9.7 percent. (With the Ford F series solidly in number 1.) So why a second shift?

(Allegedly) Best Selling Cars Of All Times

If you consider the fact that 240,000 Corolla/Matrix were sold stateside in 2011, and if you recall that there had been a rumor that Toyota could stop all Corolla exports from Japan due to the Godzilla yen, you may wonder whether that has something to do with it. Also, the current E140 generation of the Corolla is getting mighty long in the tooth – time for a new one? The always well-informed Kaizen Factor says:

“Nah. The North American Corolla appears one year later than its Japanese Corolla and European Auris siblings, and the latter isn’t expected to be unveiled until this September’s Paris Auto Show. “

I’ll ask tomorrow at the Toyota results conference in Tokyo. Not that I expect any answers .

This just in: “The U.S. auto industry has dropped a demand for Japan to abolish rules related to minivehicles ahead of upcoming talks between the two sides over the Trans-Pacific Partnership (TPP) free trade zone,” The Nikkei [sub] writes after reading this story.

Detroit made the generous concession to let Japan have its kei cars ahead of talks between Japan and the U.S., to be held in Washington on Tuesday. 1.52 million kei cars changed hands in Japan in 2011.

The small cars enjoy lower taxes and lower insurance rates in Japan. Previously, the Big Three U.S. automakers found that highly unfair. Rumor has it that after one of the three asked to have the demand dropped, the matter is fair again.

The Nikkei heard that U.S. automakers are worried that opposition against Japan could delay negotiations with other presumptive TPP members. GM wants to expand into fast-growing countries such as Vietnam and Malaysia. These countries are taking part in the TPP talks. A successful deal would make U.S. cars more competitive in these countries.

In the meantime, Japanese are worried about “GM crops.” No relation to the General – the “GM” stands  for Genetically Modified. Allegedly, two thirds of U.S. food already is “Frankenstein food,” Japan’s Majiroxnews says. Fanning these flames would have much better chances for success than denying the Japanese their lower taxed kei cars.

Illustrating the state of the Japanese auto industry, and especially that of Honda, Honda unveiled its prototype of the NSX yesterday in Tokyo. The Acura sports car had been rumored for two years, and was shown at the Detroit Motor Show. Honda repeated in Tokyo what it had said in Detroit:

The car should become available in 2015. It will be a hybrid, will be built at Honda’s plant in Ohio and will be exported to Japan.

The long wait until delivery does not dissuade Honda from investing heavily into Jerry Seinfeld, Jay Leno, and a big media buy for the Super Bowl. We dare not to ask who or what did cost more. The ad tries very hard to turn the wait until 2015 into something positive.

In Tokyo, President Takanobu Ito promised the assembled yawning media that the car “will combine both driving pleasure and environmental performance.”

After the Japanese tsunami and Thai flood, Honda emerged as the hardest hit of the Japanese majors. In 2011, Honda lost 20 percent of its global production, while Toyota lost 8.2 percent. Nissan added 14.3 percent.

The rolling out of new models people can buy becomes more urgent every day. If a car that had been seen before, and that will be delivered in three years, is the topic of a news conference and a multi million dollar media buy, then Honda likely will limp along for a while.

“Alright. Can we talk about something else?”

Toyota announced its consolidated (i.e. including Daihatsu and Hino) 2012 sales plan today. It causes intensive head-scratching at other automakers, especially in Wolfsburg. Toyota plans to raise its 2012 global sales by a whopping 21 percent to 9.6 million.

In 2011, Toyota fell to place three behind GM and Volkswagen. In December, and  again a week ago, we opined that Toyota would probably shoot for anywhere between 9.4 and 9.6 million this year. Toyota shoots for the top range. Consolidated, Toyota budgets for an ambitious 30 percent gain in Japan, and an 18 percent increase elsewhere.

The 9.6 million budgeted by Toyota are more than the 9 million that earned GM its number one ranking in 2011. GM is not standing still either. GM would need only a 7 percent gain to retain its top spot – if Toyota delivers on plan.

It looks a little different for Volkswagen. Volkswagen reported 8.2 million for 2011. It could be 8.4 million if they end up adding trucks made by Scania and MAN. Volkswagen would have to increase its 2012 pace by 18 percent to beat an on-budget Toyota. That would be tough given that Volkswagen is heavy in Europe (expected to contract in 2012) and China (expected to go sideways or down in 2012.) Gains of the Volkswagen Group in 2011 were 14.3 percent.

This year, the race for the top spots should be quite interesting. Unless the sky falls somewhere, that is.

“In 1909, people shifted from the horse carriage to the automobile, and horses retired from the world of mobility. What happened to the horses? We still have horse races. People love horses. People support horses and horse racing. As long as car enthusiasts exist, motor sports will continue.”

Akio Toyoda, February 2, 2012, at the hachi-roku launch party

“Some Americans already put a 5 liter engine in a Mazda roadster. There are fanclubs who want to do the same with our car. There is no rule to limit that. As manufacturers, we can’t do that. We have to give guarantees. We need to build cars that last. Tuners can try. We welcome that.”

“As it is, only highly skilled drivers can make full use of the stock engine. Some people may like to have a higher speed in the straightaway, but there are lots of other cars they can choose.”

Nevertheless, Tada leaves the door open to more factory power, with interesting partners:

“For our current engine, we cooperated with Subaru. Maybe we cooperate with Porsche or someone else next time. You can partner with anybody in the world these days.”

BMW for instance?

Hachi-roku Chief Engineer Tetsuya Tada credits his sons with giving him the impetus to develop this car. His sons are 24 and 27 now, they do not have a driver’s license and show no interest in cars. “They sit in front of the computer all day,” says Tada. “On Gran Turismo, they are better than their father. But they don`t want to drive.”

Tada tells how he took his boys to the racetracks since age 5 to awaken an interest in cars. It was a disaster, Tada admits:

“Manufacturers like to blame young people for having no interest in cars. Maybe we should blame ourselves. Manufacturers provided boring cars and focused on older people, because this is where the money is. We have abandoned young people.”

Creating new excitement for young people in an affordable car became the driving force behind the hachi-roku. Then, Tada had another idea. “I want to provide an interface between our car and their computer.” When Tada mentioned this to his sons, their eyes lit up.

Toyota, says Tada, developed an interface that makes CAN bus data available to a computer or game machine. Toyota has ditched all driving nannies on the hachi-roku, and pared down the electronics to what is legally mandated. But the car must have a CAN bus, and Tada wants to give the data to the driver. Not like a glorified data logger. Says Tada:

“People could load driving data into Gran Turismo and recreate the drive. We can combine the data with Google streetview. People could drive in the real world against a virtual F1 driver. They can have fun with the data.”

Hachi-roku owners can do whatever they or developers come up with, because Tada wants to publish the specs.

A patent for that interface has been applied for, and as mentioned before, the gizmo “should be ready to buy by August 6^th.”

I requested an advance copy and will keep you posted. I better buy Gran Turismo.

The car is made at Subaru’s Gunma Manufacturing Division, 1,000 per month. Currently, there are more than 3,000 pre-orders, I better take a number. “But when will the car arrive in the U.S.?“ is what you and I want to know. “Not decided yet,” is the official answer.

Privately, I hear that the car should arrive in America, “sometime in summer.” It will be many hot months before Jack Baruth knows whether he is amongst the chosen 86.

Later, I question hachi-roku Chief Engineer Tetsuya Tada, about the U.S. launch date. No answer. Then, a possible hint.

It soon becomes evident that Toyota is really in love with everything 86. The car will be exported to 86 countries, Tada says. Later, we discuss an electronic gizmo Tada dreamt up (to be covered in the next installment,) and I ask Tada whether the gizmo will be available before the car arrives in the U.S.

“Oh, I expect it will be ready by August 6,” says Tada.

I ask him whether that day has a special importance.

“It is an eight and a six,” says Tada with a sibyllinic smile.

Hmmm.

Later in the evening, I receive a phone call from Toyota, saying that I shouldn’t take the 86 countries at face value, it might be a different number. What about August 6, I ask. “Let’s not even go there,” is the answer. Oh, the incertitude!

However, I was told that today, that now we have real specs and prices, and the cars (which looked deceptively like the production prototypes) are the ones that will be sold. In Japan. As for America –– we’ll get to that. Here are the vital stats of the hachi-roku JDM spec:

Trim levels: RC, G, GT, GT “Limited.”
Weight: From 1,180kg (2,601 lbs) for the RC version to 1,250kg (2,756 lbs)
Engine: DOHC horizontally opposed 4-cylinder direct injection
Output: 147kW (200hp) / 7,000 rpm
Torque: 205nm / 6,400 – 6,600 rpm
Wheelbase: 2,570mm

And to answer a burning and often asked question: Yes, a tape deck, even a CD radio with USB are available. As options.

Now, the prices. Prices range from 1,990,000 yen for the RC version to 3,050,000 yen for the “the works” GT Limited version. The RC version is a barest minimum stripped spec, meant for environmentally responsible racing: This way, you don’t have to toss stuff you don’t need on the track. But don`t fall in love with the specs unless you are in Japan.

“The U.S. model will be a Scion,” hachi-roku Chief Engineer Tetsuya Tada tells me later in a tete-a-tete. “Scion’s concept is one trim level. That should be comparable to our GT trim.”

In Japan, the GT trim costs 2,790,000 yen for the stick shift, and 2,870,000 yen for the automatic. That would be a whopping $36,677 if converted by Google. For the stick.

Toyota spokesfolk and later Tada warned repeatedly against coquettish currency conversions, as they made the rounds on fan sites. The Japanese prices includes taxes, and in any case, prices in other countries will be what the market requires, not what Google says. The U.S. price remains a secret. I would guess it’s below $30K, but no way is it below $20K. And no, no stripper version stateside. You heard the man.

Today, I will write about nothing else than Hachi-Roku, while the rest of the gang will serve you TTAC’s unusual fare of opinionated news, new opinion, old cars, fast women and rare guitars.

I shall be back after I have transcribed my tapes and developed my film. You will hear specs, prices, launch dates. You will learn why the grown-up son of the hachi-roku Chief Engineer has no driver’s license, and how this gave birth to a new idea. You will also hear why Akio Toyoda thinks that cars may become as relevant as horses, and why that’s o.k.

Stay tuned.

Someone at Toyota told The Nikkei [sub] today that the company “received about 120,000 orders for its new Aqua compact hybrid between its Dec. 26 release and Jan. 31, 10 times the monthly sales target of 12,000 vehicles.” Toyota markets the car as the Aqua in Japan. In the U.S. and other markets, it will be called Prius C.

These orders go on an already big pile. When the car was formally launched on December 26 in Tokyo, Toyota “had received orders for 60,000 Aqua hybrid cars ahead of its launch,” says the Wall Street Journal. At that time, the waiting period for the car after an order was placed was said to be four months.

The onslaught of orders puts Toyota in a quandary. Not only have they planned for 12,000 units a month.These plans are also hard to, well, change. As Prius C Project Manager, Masahiko Yanagihara, had patiently explained to this reporter, the Aqua/Prius C is being built in the Iwate plant of subsidiary Kanto Auto Works in Kanegasaki. This plant has a maximum capacity of 30,000 units a month, if Toyota pulls out all the stops and works overtime. However, the plant also makes “other cars, such as the Ractis, Belta, Blade etc.” Until Toyota finds ways to expand its production capacity, the car will remain in short supply.

This shortage will only be exacerbated when the car is launched worldwide this year, while production remains back in Japan. Dubbed as “the world’s most fuel efficient hybrid car,” the Prius C is slated for sale in 50 countries, including the U.S. In Europe, Toyota will release a new small hybrid based on the Yaris compact. It will use the same hybrid system as the Aqua. Timing for the overseas launch has not been released. In the U.S., the Prius C is said to have a starting price of around $19,000. A look at gasoline prices and world news says that an affordable 53 mpg (EPA, city) car could not have come at a better time. If there would not be that bottleneck called Iwate. And the Yen.

Toyota has been hesitant in establishing hybrid production outside of Japan. The numbers seem to back this up. The Prius is Japan’s best selling car. This year, the title could go to the Aqua/Prius C. Outside of Japan, hybrids are still a niche play. The market share of hybrids in the U.S. was 2.11 percent in 2011, down from 2.78 percent in 2009. The Prius C is the little car that could change that.

When the March 11 tsunami hit, observers thought that of Japan’s major automakers, Honda would be the least exposed. Most of its global production already is outside of Japan. Very few cars that are produced in Japan are exported. Toyota and Nissan looked much more vulnerable. Distrust predictions: Today, Honda presented the results for the last quarter of 2011. The numbers  look uglier than the cars in the video.

In the October-December quarter, Honda’s operating profit dropped 65 percent to 44.3 billion yen ($580 million). Analysts polled by Reuters had expected twice as much. For the fiscal year ending March 31, 2012, Honda expects an operating profit of 200 billion yen ($2.6 billion), down 65 percent from the year before. In August 2011, Honda had forecasted 270 billion yen. That was before the Thai floods hit.

Top Three Japanese Automakers,  Calendar 2011
(Thousand units. Source: company reports)

Comparing the full year 2011 production numbers (first column: unit production 2011 in thousands, second column: change to 20-10,)  Honda emerges as the worst hit of Japan’s bigger makers. It lost 20 percent of total production. Toyota lost only 8.2 percent, Nissan added 14.3 percent. Despite having most of its production outside of the country, Honda soon emerged as the most unlucky tsunami victim. Parts shortages affected production the world over.

Then in fall last year, Thailand was inundated by a record flood. While other Japanese makers suffered outages due to parts shortages, Honda’s Thai plant was submerged for months and is a near total write-off.

There were more disasters. The high yen had and has all Japanese makers on edge, so did the tanking Japanese market. Only Honda has a remodeled Civic which “got panned in the United States when it was remodeled last year,” as Reuters put it.
Toyota will report on February 7, Nissan on February 8. We will see what their numbers bring. Have a look at the table above  and guess.

It was the early 2010, the Toyota witch hunt was in full swing. While Toyota executives were burnt at the stake grilled on the Hill, Denso’s U.S. offices were raided by the FBI. Denso is a major automotive parts supplier, and a member of the Toyota family. The raid was part of an on-going investigation into alleged anti-trust violations. Or so they said.

After the NHTSA, NASA and the National Academy of Sciences could not find a ghost in the machine, the Department of Justice also cleared out its case file. For a fee.

Denso and the DoJ cut a plea deal. Denso will pay a fine of $78 million “based on charges that it violated antitrust laws in connection with sales of certain automotive components” to one of its customers, Denso said today in a statement.

The fine will hit the books as a (hopefully) non-recurring one time charge in the third quarter of the fiscal year ending March 2012. It is said to have “no material effect on the Company’s financial forecast for the fiscal year.”

Internally, there is some finger rapping: Denso’s chairman, president and some board members and executive directors have to “voluntarily return 30 percent to 10 percent of their compensation for a three-month period starting in February 2012.”

Another supplier, Yazaki Corp., did not get off as easily. The company agreed to plead guilty to U.S. charges and pay a $470-million fine, says the LA Times. Even more painful, four of its executives are to serve prison terms of up to two years, the paper says.

Actually, I still know nothing about the car carriers that sail the high seas. The Nichioh Maru is a coastal ship. It steams, well, diesels up and down the Japanese archipelago on its route between Oppama, Kobe and Kyushu. On four decks, the Nichioh Maru has room for 1,380 cars. Yesterday, the ship completed its first day on the job by bringing cars to Oppama. Today, it loads Leafs while I watch.

By comparison, the Panama-flagged Eternal Ace that swallows cars for overseas shipping in the dock next door has room for 5,563 cars. That according to Jane’s merchant ships. If you want to get the inside track on a 5,000+ unit class car carrier, simply multiply this story by three and a half, and then deduct the green.

Did I say green? After building zero emission vehicles like the Leaf, Nissan is tackling the ships that bring them. The Nichioh Maru is not quite zero emission yet, but the ship achieves a 20 percent reduction of fuel used and CO2 produced over conventional ships, I am told today.

The ship does so with an electronically controlled 18,000 hp diesel engine (produced by MAN.) The ship has LED lighting in the ship’s hold and living quarters, and its hull is painted with the latest in low friction coating.

The top of the ship is covered with solar power panels, the first time on a coastal ship in Japan, my handlers say. The solar panels create a hefty 50 kW of power, some of it stored in a battery for when the sun don’t shine. That ship is so green that the fire extinguishing system is foam type, and not CO2. Even when in flames, that ship won’t emit unnecessary CO2.

For the nautical gearheads, the engine is an MAN B&W 8S50ME-C8. That is an eight cylinder, super long stroke, 50 centimeter piston, M-program, electronically controlled, “compact” engine, Mark 8. Glad you asked.

Inside, the ship looks like a big multistory garage. Except that there are tie-downs in the floor. To prevent the ship from rolling too much (with possible ill effects on not tied down cars), the ship can shoot water from port to starboard ballast tanks, and back.

First 40 cars loaded. Only 1,340 more to go.

On the bridge of the Nichioh Maru.

I couldn’t find a steering wheel on the bridge until I found this small thing. The ship appears to steer itself.

It does so assisted by the latest in on-board navigation. Front and stern thrusters obviate tugboats. Just line up with the dock, push a button – dozo!

No messes in this ship’s mess. Everything is neat and tidy, this is a Japanese ship.

And yes, take your shoes off, this is a Japanese ship.

Galley. The crew can dine in style.

A half-empty bottle of sake is quickly removed. I am being assured that its content was offered solely to Shinto deities to bring good luck to the ship.

Captain’s wardroom. More space than in an average Japanese apartment.

An that’s it – tour’s over! While I write this, the Nichioh Maru is already underway to Kobe and Kyushu.

Before  his passing, the late North Korean leader Kim Jong-il visited China in May 2011. At these events, it is customary to exchange welcome gifts. When Kim visited the First Auto Works (FAW) in Changchun, Jilin Province. Kim received a Red Star Hongqi with a big red bow on the hood. At least if the sources of Carnewschina are correct.

As the sources are identified as a “South Korean army fan-site,” reader discretion is advised.

Of course Kim had to reciprocate, that gift was generous. A full-spec HQ3 costs 688.800 yuan in China, or $108.000 US, or so we are told.

Kim ordered 3,.000 of the above pictured 6×6, FAW’s newest army truck. And some ‘army jeeps.’ as well.  Consider everything settled.

Carnewschina opines that the choice of the a Hongqi HQ3 as a gift was a bit odd:

“The car is based on a Toyota Crown, made in China by the FAW-Toyota joint venture. Toyota for sure is a Japanse brand and North Korea hates Japan big time, even more than it hates the US and South Korea.”

Maybe, when the Dear Leader found out the truth about his gift, he had a heart attack.

Today, Toyota announced its official December and end of calendar year production numbers. In December, Toyota’s worldwide production was up 13.1 percent to 757,226 units as ToMoCo hustles to make up for sales lost under Japanese tidal waves and Thai floods. For the year, worldwide production of all TMC divisions (including Daihatsu and Hino) dropped 8.2 percent to exactly 7,858,091 units. Overseas production dropped 3 percent to 4,374,627  units, while Japanese  production got it on the chin to the tune of 13.9 percent, or 3,483,464 units.

This closes, at least for the time being, the books on the race of the giants for places on the podium of the world’s largest automakers, a race everybody (except Volkswagen) denies to be in. Here are the official standings:

World’s largest automakers 2011

Note the remarks. GM reports “sales.” Its official number might be revised once GM’s quarterly report come out. Volkswagen reports “deliveries to customers,” whoever these customers might be. Toyota reports production.

Once the numbers are handed in to OICA for the purposes of the belated crowning of the allegedly reluctant king (some time in July 2012,) all will have to report production numbers. Not that they would make a difference.  Even if Volkswagen adds on the 200,000 or so trucks made by MAN and Scania to its 8.16 million total, it won’t make a dent in the ranking.

Last year’s race had been decided on March 11. This year, it could get more interesting.

The good folks who are still convinced that the Japanese car market is closed, can count themselves lucky. Would they have been with me today, they might have doubted their beliefs and strayed from the faith. Today, Lexus finally rolled out its new GS line in Japan. America had already seen it last Summer, and two TTAC testers actually drove the cars.

Today, two straight-laced Lexus executives told reporters in Tokyo that imported cars are so successful that Lexus would like to have some of that success and that they strive to take some of the imports’ growing market share.  Kazuo Ohara, Deputy Chief Officer of Toyota`s luxury arm Lexus said:

“In Japan, there is a strong customer segment that is always interested in buying imported cars, and this is the segment we would like to capture.”

The trouble is, those customers are interested in buying German luxury cars.

Kiyotaka Ise, chief officer of Lexus, identified Germany’s Mercedes, BMW and Audi as the darlings of Japanese customers Lexus would love to lure into its showrooms. Easy call, one look at this table says it all:

Japan`s top selling luxury cars, 2011

Indeed, together the Teutonic Top-of-the-line brands sell more than twice as many cars in Japan than Lexus does in its home market.

This won’t change anytime soon. Ohara conceded that it will be a while until Lexus will pry the German iron out of Japanese hands. In Japan, Ohara thinks that this year’s Lexus sales will be only “somewhat higher than the level of last year.”

The growth is supposed to come from elsewhere. “Last year, we sold 404,000 units, and this year, we would like to achieve 510,000,” Ohara said.  That is an ambitious 21 percent growth, the same percentage number Toyota has set itself as a target.

But back to the imported cars Japanese like. It’s not that America does not have Kei cars. Hell freezes over before America produces small cheap boxes with pint-sized motors. (Hold your horses, I know that 0.66 liters are  a pint and a gulp .) America does not have the big bore luxury cars a rich Japanese clientele craves.

Cadillacs imported to Japan in 2011? 1,392 .

Meanwhile, car imports to Japan rose 22.5 percent this year to 275,644, while the domestic market (ex Kei cars) was down 16.7 percent.

“The new target still falls well short of the more than 9 million vehicles sold last year by the world’s largest auto maker, General Motors Co., meaning Toyota is unlikely to easily win back the No. 1 spot anytime soon.

Toyota expects to sell 100,000 more vehicles than it previously expected in its home market this year as a result of a government decision last month to reintroduce subsidies for fuel-efficient cars.

That expected boost caused it to raise its global sales target by the same amount to 8.58 million vehicles, representing a 21% gain on the previous year.”

So says the Wall Street Journal, and it is not true. Its Tokyo reporter Yoshio Takahashi should know better, but for some reason, he does not. Takahashi-san, and the WSJ fell into a trap trained observers of the numbers game know to avoid. The Wall Street Journal mistook the  Toyota brand’s numbers  for the numbers of all of Toyota. Which also includes Daihatsu and Hino.

Let’s go step by step. In today’s press release, and with little fanfare, Toyota disclosed sales numbers for 2011. Here they are:

As expected, Toyota’s global sales were below 8 million, 7.95 million to be exact.  This puts Toyota squarely in the #3 position behind GM and Volkswagen, a ranking which we had predicted for many months.

Today, Toyota also disclosed a revised sales plan for 2012. Here it is:

This plan is 100,000 units higher than the December plan on more optimistic sales projections for Japan.  The plan was up-revised after the Japanese government announced that it would continue to subsidize fuel-efficient cars (which is pretty much a subsidy for most cars in Japan.)

Now where is the mistake? The 8.58 million are for the Toyota (and Lexus) brands only. They do not include Daihatsu and Hino.  Once you are in the context of the more than 9 million cars sold by GM, you need to stay in the context of all brands. Kudos to Reuters and Bloomberg for getting it right.

What is Toyota’s projection as a whole? Toyota does not make one. Neither last December not today does TMC project numbers for Daihatsu and Hino. If one would raise TMC as a whole by 21 percent, the number would be 9.6 million, and far greater than what GM reported for last year. To do so however would be reckless, Toyota does not give a basis for this assumption. However, even if one would assume that Daihatsu’s and Hino’s sales would be flat, the grand total for this year would be 9.4 million. If Toyota delivers on the plan published today, that is.

All we know today: This year, the race for the top spot will have much more suspense than last year.

While Honda and Mazda are just getting their respective footholds in Mexico (the two automakers are opening up respective assembly plants in Mexico), Nissan has had a long presence south of the border, building cars at its Augascalientes, Mexico plant for decades.

Nissan is set to build an all-new plant in Augascalientes, with a total investment of $2 billion. The plant will produce B-segment cars (such as the Versa). Nissan CEO Carlos Ghosn is on a major push to avoid exporting Japanese-built vehicles due to a strong yen. The Mexican plant will help shore up North American vehicle production, as Nissan’s Smyrna, Tennessee plant will add a range of new vehicles shortly, including the Infiniti JX, the Nissan Rogue and the Nissan Leaf. Greater expansion of the new plant, as well as facilities for suppliers were also in the cards.

With the goal of becoming Latin America’s top Japanese OEM, as well as outselling Honda in the United States, the new plant is crucial to Nissan’s plans. Nissan is hoping to have the factory producing cars in less than 24 months.

Rare earth free electric motor

China is learning an interesting lesson: Only take a hostage if the other side wants it back. According to Japan’s Kyodo Newswire [sub], Toyota “has acquired technology to produce hybrid and electric vehicles without using rare earths and may begin doing so in about two years.”

In 2010, China used its rare earth as a political tool. To make a point with the Senkaku islands, China tinkered with the rare earth supply, and prices shot up. Rare earth is in the  magnets that power everything from disk drives to  hybrid and electric cars. Japan relies on China for about 90 percent of its rare earth supply, says Kyodo. Japan did not want to be blackmailed. Universities in Japan stepped-up research into dirt-free magnets. A year later, Toyota’s engineers reached an “advanced stage” of research on a new “induction”-type electric motor which holds the promise of freeing the Japanese automaker from dependence on rare-earth materials.

Toyota now seems to be close to commercialization, and it engages in its own, well, bargaining.  Says Kyoto:

“Toyota will keep using rare earths if their prices drop, but will consider putting the newly acquired technology into practical use if their value continues to surge.”

When asked by Reuters, “a Toyota spokeswoman said the company continues to research ways to reduce rare earth usage and has no time frame yet for commercialization.”

Sure. Remain unpredictable, lesson number two.