The Truth About Cars » Japan http://www.thetruthaboutcars.com The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Sun, 18 Jan 2015 16:55:47 +0000 en-US hourly 1 http://wordpress.org/?v=4.0.1 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars editors@ttac.com editors@ttac.com (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » Japan http://www.thetruthaboutcars.com/wp-content/themes/ttac-theme/images/logo.gif http://www.thetruthaboutcars.com Toyota Receives Over 1,500 Orders For Mirai FCV In Home Market http://www.thetruthaboutcars.com/2015/01/toyota-receives-1500-orders-mirai-fcv-home-market/ http://www.thetruthaboutcars.com/2015/01/toyota-receives-1500-orders-mirai-fcv-home-market/#comments Fri, 16 Jan 2015 13:00:51 +0000 http://www.thetruthaboutcars.com/?p=984281 One month after Toyota began sales of its Mirai FCV in Japan, around 1,500 have been ordered thus far, well over the 400 the automaker thought it would sell for the entirety of 2015. Carscoops reports the 1,500 orders are split 60/40 in favor of government and corporate fleets. The overall majority of the orders […]

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One month after Toyota began sales of its Mirai FCV in Japan, around 1,500 have been ordered thus far, well over the 400 the automaker thought it would sell for the entirety of 2015.

Carscoops reports the 1,500 orders are split 60/40 in favor of government and corporate fleets. The overall majority of the orders come from four locations in the country: Tokyo, Kanagawa Prefecture, Aichi Prefecture and Fukuoka Prefecture. Due to its popularity, however, Toyota said it may take a while to fulfill those orders.

The Mirai is expected in the United States beginning later this year, and will sell for $57,500 before federal and state tax credits. A 36-month lease will also be available, with $3,649 due at signing, and $499 per month thereafter.

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Subaru Cancels Plans For US-Made XV Crosstrek http://www.thetruthaboutcars.com/2014/12/subaru-cancels-plans-us-made-xv-crosstrek/ http://www.thetruthaboutcars.com/2014/12/subaru-cancels-plans-us-made-xv-crosstrek/#comments Fri, 26 Dec 2014 14:00:04 +0000 http://www.thetruthaboutcars.com/?p=968122 Were you hoping to buy an American-made Subaru XV Crosstrek? You can breathe now. Reuters reports Subaru has cancelled plans to relocate production of the CUV to a facility in Lafayette, Ind., opting to keep production at home in Gunma prefecture. The original plan — based on the automaker’s policy of assembling vehicles in the […]

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Were you hoping to buy an American-made Subaru XV Crosstrek? You can breathe now.

Reuters reports Subaru has cancelled plans to relocate production of the CUV to a facility in Lafayette, Ind., opting to keep production at home in Gunma prefecture.

The original plan — based on the automaker’s policy of assembling vehicles in the markets where they’re sold — called for 65,000 XV Crosstrek models to leave the line in Indiana every year. Capacity constraints at said plant, along with the high sales price for the vehicle — $21,595 for the base 2-liter, $25,995 for the hybrid model — conspired to alter those plans.

The decision follows similar actions from other Japanese automakers, citing a weakening yen as the main driver.

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Piston Slap: American Rust vs. Japanese Rust? http://www.thetruthaboutcars.com/2014/12/piston-slap-american-rust-vs-japanese-rust/ http://www.thetruthaboutcars.com/2014/12/piston-slap-american-rust-vs-japanese-rust/#comments Tue, 23 Dec 2014 12:49:25 +0000 http://www.thetruthaboutcars.com/?p=963650   Stefan writes: Sajeev, I recently had a conversation with my cousin in Wisconsin. He claimed that cars assembled in North America are more rust prone than cars assembled in Japan or other oriental countries. Apparently his observation was based on several cars in our extended family: An elderly Dodge Durango and a not-so-elderly Honda […]

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Rusty Mazda Protege5 (photo courtesy: old Piston Slap post)

Stefan writes:

Sajeev, I recently had a conversation with my cousin in Wisconsin. He claimed that cars assembled in North America are more rust prone than cars assembled in Japan or other oriental countries. Apparently his observation was based on several cars in our extended family: An elderly Dodge Durango and a not-so-elderly Honda Odyssey with the traditional clapped-out transmission.

I have never seen any statistics to support these ideas and really don’t recall reading suchlike statements in the TTAC in the past. That older American cars rust more than newer Japanese, and vice versa, seems natural and I recall seeing many old Japanese cars with severe corrosion damage, but what is the truth in this matter? Over to you and the B & B!

Stefan (’97 Fat Panther without a speck of rust)

Sajeev answers:

This is pure Internet Troll Bait, but whatever…I’ll bite.

Cars made in Japan used to be inadequate for use in the American Rust Belt, back in the 1970s.  That’s history, as Japan wised up and eventually made the vehicles that would dominate the marketplace in every American market they compete in. (well, except trucks #murica)

The only modern cars that I’ve seen (and I live in Houston) or heard to be chronically rusty are Mazdas from the last decade.  Discussed here, here and here. Oh, and the Toyota Tacoma, witnessed by the massive recall.  One person mentioned a Ford Focus, and that’s about it.

And in this most unscientific sampling, only the Mazda is not made in North America.  So your cousin is wrong.

UNDYING PANTHER LOVE (photo courtesy: syracuse.com)

Dead Wrong: USA, USA, USA!!!

Off to you, Best and Brightest.

 

Send your queries to sajeev@thetruthaboutcars.com. Spare no details and ask for a speedy resolution if you’re in a hurry…but be realistic, and use your make/model specific forums instead of TTAC for more timely advice.

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Monday Fun: Nissan Parties Like It’s 1995 http://www.thetruthaboutcars.com/2014/12/monday-fun-nissan-parties-like-its-1995/ http://www.thetruthaboutcars.com/2014/12/monday-fun-nissan-parties-like-its-1995/#comments Mon, 15 Dec 2014 13:00:00 +0000 http://www.thetruthaboutcars.com/?p=955842 If you’re like me, a dose of 90s Japanese automotive nostalgia is about as good as Prozac. Friend of TTAC Michael Banovsky unearthed this gem – a still intact website from 1995 highlighting Nissan’s home market offerings at the Tokyo Motor Show. Coming on the tail end of Japan’s golden age of automobiles, the development cycles […]

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If you’re like me, a dose of 90s Japanese automotive nostalgia is about as good as Prozac. Friend of TTAC Michael Banovsky unearthed this gem – a still intact website from 1995 highlighting Nissan’s home market offerings at the Tokyo Motor Show.

Coming on the tail end of Japan’s golden age of automobiles, the development cycles planned at the height of Japan’s economic bubble were coming to an end. For Nissan, this was a few years before the Carlos Ghson-era, and the rationalization of product and platforms had not yet begun. Vehicles like the Cima, Cedric and Gloria were sold side-by-side despite marginal differences in styling and content, while the aging 180SX was sold alongside the much more modern S14 Silvia.

My pick of the lineup is the Rasheen (above), a Pulsar-based CUV that coupled the slab-sided styling of a Hummer with the packaging of a Dacia Sandero-like front-drive CUV that was meant to be rugged and spartan, rather than a RAV4-like cute-ute.

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Takata Refuses NHTSA Call For Nationwide Airbag Recall http://www.thetruthaboutcars.com/2014/12/takata-refuses-nhtsa-call-nationwide-airbag-recall/ http://www.thetruthaboutcars.com/2014/12/takata-refuses-nhtsa-call-nationwide-airbag-recall/#comments Wed, 03 Dec 2014 14:00:17 +0000 http://www.thetruthaboutcars.com/?p=955057 Takata won’t be conducting a nationwide recall of its defective airbags anytime soon, but did hire three former U.S. Transportation Secretaries to help the supplier manage the crisis. Meanwhile, an airbag in an non-recalled model explodes in a Japanese junkyard; the National Highway Traffic Safety Administration won’t push for a nationwide passenger airbag recall; and […]

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Toyota WiLL Cypha

Takata won’t be conducting a nationwide recall of its defective airbags anytime soon, but did hire three former U.S. Transportation Secretaries to help the supplier manage the crisis. Meanwhile, an airbag in an non-recalled model explodes in a Japanese junkyard; the National Highway Traffic Safety Administration won’t push for a nationwide passenger airbag recall; and Toyota and Honda both call for an industry review of Takata’s wares.

The Detroit News reports the supplier informed the NHTSA Wednesday morning that it will not conduct a nationwide recall of vehicles in the United States equipped with driver-side airbags, as requested by the agency in a special order made last week, and whose deadline was December 2. Deputy administrator David Friedman expressed the agency’s disappointment in a statement, lamenting Takata is failing to live up to its responsibility toward keeping drivers safe. Chair and CEO Shigehisa Takada proclaimed in his own statement that his company “remains committed to cooperating closely with our customers and NHTSA to address the potential for inflator rupturing.” An initial decision and public hearing demanding the supplier to recall is the next step for the NHTSA.

Detroit Free Press says Takata called upon former Transportation Secretaries Sam Skinner (George H.W. Bush), Rodney Slater (Bill Clinton) and Norman Mineta (Clinton, George W. Bush) to help guide it through the crisis. Skinner is slated to lead a quality assurance panel to help the supplier better design its airbags, while Slater and Mineta will provide counsel to help it “regain the public’s trust.”

Though the NHTSA is pushing for Takata to recall every driver-side airbag possibly affected by the quality issues at the center of the current regional recall, Automotive News says the agency isn’t in a hurry to do the same for passenger-side airbags. Friedman informed the U.S. Senate Subcommittee on Commerce, Manufacturing and Trade in a written statement that such a recall “is not supported by the data as we now understand it. At this point, a national recall of all Takata air bags would divert replacement air bags from areas where they are clearly needed, putting lives at risk.” That said, if the supplier’s test data proves otherwise, the agency may demand a recall for those airbags, as well.

Over in Japan, a Takata airbag exploded in a 2003 Toyota WiLL Cypha at the Chikamatsu Shokai Co. scrapyard in the Gifu prefecture. Manager Akihiro Wakayama was caught off-guard by the explosion, as the car in question was not among the models already under recall:

I was surprised once again because the unusual explosion occurred in a vehicle that we were told to be safe. That made me think we really don’t know what we can trust to do our work safely.

The WiLL Cypha’s airbag detonation marks the seventh occurrence of junkyard detonations in Japan since June 2012, with the first six occurring among four Honda Fit and two Toyota Corolla models in July of that year. The incidences prior to the Cypha’s — all occurring during detonation procedures as prescribed by the nation’s Automotive Recycling Law prior to scrapping — led to an additional 3 million units being recalled globally.

Speaking of Toyota and Honda, The Detroit News says the two Japanese automakers are calling for a coordinated effort among the entire industry to independently test Takata’s airbags for defects. Both companies issued separate statements to Takata and eight other manufacturers — including Ford, Chrysler and General Motors — asking them to commit to the effort. Ford said it would heed Toyota’s call, with Chrysler Group proclaiming it would “remain committed to identifying the root cause” of the malfunctions, and GM taking the call “under NHTSA guidance.”

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Toyota’s LFA Works Now Home To Mirai FCV Production http://www.thetruthaboutcars.com/2014/11/toyotas-lfa-works-now-home-mirai-fcv-production/ http://www.thetruthaboutcars.com/2014/11/toyotas-lfa-works-now-home-mirai-fcv-production/#comments Fri, 28 Nov 2014 13:00:55 +0000 http://www.thetruthaboutcars.com/?p=952529 Remember when Herr Schmitt took us for a TTAC exclusive into the workshop that made the Lexus LFA? It’s now the home of the Toyota Mirai. Automotive News reports Toyota gave its FCV to the LFA Works — located behind the Motomachi plant in Toyota City, Japan — because the facility’s attention to detail and […]

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Remember when Herr Schmitt took us for a TTAC exclusive into the workshop that made the Lexus LFA? It’s now the home of the Toyota Mirai.

Automotive News reports Toyota gave its FCV to the LFA Works — located behind the Motomachi plant in Toyota City, Japan — because the facility’s attention to detail and better tools (i.e., hands) than any of the more “ultra-efficient,” machine-powered factories under the automaker’s watch.

Because of the Mirai’s hand-built nature — the powertrain and other components are assembled in Toyota’s Honsha plant, then brought over to the LFA Works for final assembly — executive vice president for domestic sales Masamoto Maekawa warns supplies will be limited, with only 700 planned for the first year, 200 of which are already on-order:

Each unit is carefully built with utmost care. So therefore, the production volume might be limited. During the initial stages, delivery time might be delayed. The 200 orders are mostly from government and corporate fleets.

Prior to the Mirai, the small workshop made limited-edition models, including a $10,000, 100-unit run of carbon fiber bicycles marketed to well-off Lexus owners, a carbon-fiber roof for special performance variant of the Toyota Mark X, and of course, the 500 LFAs assembled between 2010 and 2012.

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Twenty Japanese Execs Hide In Local Exile From US DOJ http://www.thetruthaboutcars.com/2014/11/twenty-japanese-execs-hide-local-exile-us-doj/ http://www.thetruthaboutcars.com/2014/11/twenty-japanese-execs-hide-local-exile-us-doj/#comments Tue, 25 Nov 2014 12:00:21 +0000 http://www.thetruthaboutcars.com/?p=950865 At present, 20 Japanese executives are charged with price-fixing by the U.S. Department of Justice. Extradition, however, is proving hard to accomplish. Automotive News reports that while most of the 20 are no longer employed by the Japanese suppliers where they once worked, at least one — Hiroya Hirose of NSK Ltd. — still has […]

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US Department of Justice

At present, 20 Japanese executives are charged with price-fixing by the U.S. Department of Justice. Extradition, however, is proving hard to accomplish.

Automotive News reports that while most of the 20 are no longer employed by the Japanese suppliers where they once worked, at least one — Hiroya Hirose of NSK Ltd. — still has his title as section head of the ball-bearing maker’s West Japan Automotive Unit, even though he has enough charges to be thrown in prison for a decade on top of a $1 million fine.

However, all 20 are still in hiding in their home country, leaving the DOJ with no option but to file extradition. In turn, the Ministry of Justice can decide to honor the request based on what punishment awaits suspects abroad compared to Japan. As the businessmen would only receive a slap on the wrist at home, the ministry won’t be too keen on complying with the requests.

That said, the 20 are stuck in Japan thanks to the indictments, as they won’t be able to find work elsewhere. Further, the indictments put the group at the top of Interpol’s radar, allowing the agency to nab any one of the execs as soon as they leave the country.

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Honda’s Next FCX Vs. The Toyota Mirai: Your Fuel Cell Face-Off http://www.thetruthaboutcars.com/2014/11/hondas-next-fcx-vs-toyota-mirai-fuel-cell-face/ http://www.thetruthaboutcars.com/2014/11/hondas-next-fcx-vs-toyota-mirai-fuel-cell-face/#comments Mon, 17 Nov 2014 18:07:21 +0000 http://www.thetruthaboutcars.com/?p=946402 On the same day that Toyota announced plans for a hydrogen fueling infastructure on the Northeast, Honda showed off their next-generation fuel cell vehicle, re-affirming that Japan is “all-in” on hydrogen vehicles. Japan’s biggest auto maker officially announced the moniker “Mirai” for its fuel-cell vehicle, as well as vague plans for an American introduction stating […]

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Honda FCV Concept

On the same day that Toyota announced plans for a hydrogen fueling infastructure on the Northeast, Honda showed off their next-generation fuel cell vehicle, re-affirming that Japan is “all-in” on hydrogen vehicles.

Japan’s biggest auto maker officially announced the moniker “Mirai” for its fuel-cell vehicle, as well as vague plans for an American introduction stating

“Toyota is collaborating with Air Liquide to develop and supply a phased network of 12 state-of-the-art hydrogen stations targeted for New York, New Jersey, Massachusetts, Connecticut, and Rhode Island. The states and locations have been strategically selected in the greater New York and Boston areas to provide the backbone of a hydrogen highway for the Northeast corridor. Specific details of the collaboration will be revealed in the coming months.”

Honda also announced a concept of their next-generation FCX, which has a range of 300 miles and an expected re-fueling time of 3-5 minutes. While power has increased by 60 percent and the size of the fuel cell stack has shrunk by 30 percent, the big news is that the technology now allows for 5 passenger seating, whereas the previous FCX had Chevrolet Volt-like seating for four bisected by a large center tunnel.

While Nissan remains committed to EV technology, Honda and Toyota have firmly planted themselves in the hydrogen camp. Backed by massive subsidies and infrastructure projects from the Japanese government, the two auto makers have pivoted away from EVs and towards hydrogen fuel cells as the alternative powertrain of the future. The two big auto makers are likely betting on the generous government investment, the ability to scale hydrogen fuel cells to different bodystyles and the advances in hydrogen production (backed by cheap natural gas) to help spur adoption of FCVs. Of course, the market will decide the victor in the end.

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Japanese Auto Makers Crack The Closed Market http://www.thetruthaboutcars.com/2014/10/japanese-auto-makers-crack-closed-market/ http://www.thetruthaboutcars.com/2014/10/japanese-auto-makers-crack-closed-market/#comments Thu, 16 Oct 2014 18:25:00 +0000 http://www.thetruthaboutcars.com/?p=932073 While the eternal debate about whether Japan is or isn’t a closed market continues to rage onwards, the Nikkei reports that a new phenomenon is occurring in Japan: imported vehicles from domestic brands are starting to trickle in. Previously, only a very limited number of imported nameplates trickled into the Japanese market. The Ohio-built Honda […]

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While the eternal debate about whether Japan is or isn’t a closed market continues to rage onwards, the Nikkei reports that a new phenomenon is occurring in Japan: imported vehicles from domestic brands are starting to trickle in.

Previously, only a very limited number of imported nameplates trickled into the Japanese market. The Ohio-built Honda Accord Coupe was one of the most famous examples, with right-hand drive units sent back to Japan and marketed specifically as an American-built vehicle.

 

Even though the yen has weakened – a key factor in the decision to set up overseas manufacturing facilities – Japanese OEMs aren’t so eager to move production back home. As the Nikkei reports

In some cases, the economies of scale from building cars where they sell the most makes those vehicles more competitive than those produced domestically. So the automakers are moving to import these models to beef up their domestic lineups… ‘Each automaker has taken risks to conduct capital investment abroad, so it’s unlikely that the trend to manufacture locally will change as a result of exchange rates returning to earlier levels,’ says Japan Automobile Manufacturers Association Chairman Fumihiko Ike.

While models from lower cost locales like Spain, Hungary and Thailand will be brought to Japan, Honda will be bringing the Ohio-built Acura NSX over, albeit as a low volume halo car. Nevertheless, it’s an interesting twist of events, given that the Plaza Accord and voluntary export restrictions aren’t too distant a memory for many people.

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Japanese Auto Industry, Economy In Danger Of Hollowing Out http://www.thetruthaboutcars.com/2014/09/japanese-auto-industry-economy-danger-hollowing/ http://www.thetruthaboutcars.com/2014/09/japanese-auto-industry-economy-danger-hollowing/#comments Wed, 03 Sep 2014 13:00:43 +0000 http://www.thetruthaboutcars.com/?p=905697 Just like the player character after dying several times in the “Dark Souls” series, Japan may find itself hollowing out as a result of the country’s declining auto market. Bloomberg reports 333,471 deliveries were made in August, the fewest since the same month in 2011, with sales of kei cars leading the way down at […]

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Kei Vans

Just like the player character after dying several times in the “Dark Souls” series, Japan may find itself hollowing out as a result of the country’s declining auto market.

Bloomberg reports 333,471 deliveries were made in August, the fewest since the same month in 2011, with sales of kei cars leading the way down at a decline of 15 percent after cushioning demand for the past few months; the overall decline for August 2014 was 9.1 percent.

The decline may only be the beginning, however, according to analysts at IHS Automotive, Advanced Research Japan and Barclays Plc. Despite a weakened yen, recent increases in Japan’s consumption tax knocked down demand for new vehicles. In turn, automakers are keeping annual production at low levels for the local market, while capital expenditure will fall 7.9 percent for FY 2014, 1.3 percent in FY 2015.

Should the trend continue, the Japanese economy as a whole could follow the automotive industry into a hollowed out new “lost decade,” undoing Prime Minister Shinzo Abe’s attempts to revive it, such as the aforementioned weakening of the yen. Production is predicted to decline by 1.6 million units in the coming decade while global production climbs to 22 million by 2021, according to IHS Automotive.

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Ide: Apathy, Not Policy, Is Behind GM’s Japanese Blues http://www.thetruthaboutcars.com/2014/09/ide-apathy-policy-behind-gms-japanese-blues/ http://www.thetruthaboutcars.com/2014/09/ide-apathy-policy-behind-gms-japanese-blues/#comments Tue, 02 Sep 2014 10:00:54 +0000 http://www.thetruthaboutcars.com/?p=904801 Though General Motors is finding big success in China among its brands, the automaker is still a bit player in Japan, and not because of so-called nontariff hurdles. Automotive News reports Yanase & Co. CEO Takeyoshi Ide proclaims internal apathy, not external policy, as the reasoning behind GM’s current status in Japan. As one example, […]

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Cadillac in Japan

Though General Motors is finding big success in China among its brands, the automaker is still a bit player in Japan, and not because of so-called nontariff hurdles.

Automotive News reports Yanase & Co. CEO Takeyoshi Ide proclaims internal apathy, not external policy, as the reasoning behind GM’s current status in Japan. As one example, Ide — whose Cadillac and Chevrolet dealerships number at 13, down from a peak 114 — says if the automaker would consider building more RHD vehicles suited for the Japanese market, especially Cadillacs, sales of 5,000 units annually would be “not so difficult.”

He has hope that a few moves affecting Cadillac, such as the hiring of former Infiniti chief Johan de Nysschen, would make the change “GM’s original people” from Detroit haven’t been able to undergo to bring success to the automaker’s premium brand. It’s also the reason why Ide hasn’t let go of his remaining GM dealerships despite also being the nation’s No. 1 Mercedes dealer, as well as one of its top sellers of Audi and BMW vehicles.

As for external issues affecting GM, Ide says policy is not among them — Japan imposes no tariffs on imported vehicles — and is just an excuse for the United States government to maintain its tariffs, including the infamous Chicken Tax.

That said, hope may be fading as it is. The sales forecast for 2014 remains flat at 1,200 units for GM’s efforts in Japan, higher than its nadir of 700 for all of 2009, yet lower than its zenith of 47,000 units in 1996. Additionally, while Mercedes moved 31,291 vehicles onto the streets of Tokyo through July 2014, Cadillac saw its sales fall 27 percent to 425 units compared to the same period in 2013.

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Japanese Officials Pushing Hard With Subsidies For New Hydrogen Mirai http://www.thetruthaboutcars.com/2014/08/japanese-officials-pushing-hard-subsidies-new-hydrogen-mirai/ http://www.thetruthaboutcars.com/2014/08/japanese-officials-pushing-hard-subsidies-new-hydrogen-mirai/#comments Thu, 07 Aug 2014 11:00:03 +0000 http://www.thetruthaboutcars.com/?p=883545 The 2015 Toyota Mirai may be breaking new ground in the fuel-cell vehicle game beyond merely existing, as subsidies galore are being thrown at potential consumers on all sides, including the possibility of owning the FCV for free. Automotive News reports the ¥7 million ($68,556 USD) Mirai — whose name translates to “future” — will […]

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2015 Toyota Mirai

The 2015 Toyota Mirai may be breaking new ground in the fuel-cell vehicle game beyond merely existing, as subsidies galore are being thrown at potential consumers on all sides, including the possibility of owning the FCV for free.

Automotive News reports the ¥7 million ($68,556 USD) Mirai — whose name translates to “future” — will receive a ¥2 million (~$20,000) subsidy from the Japanese government when the first models go on sale next year, with residents of Aichi prefecture — the home of Toyota — taking an extra ¥1 million (~$10,000) from the local government.

However, paying only as much as ¥4 million ($39,175) for the honor of being one of the new pioneers of the silver hydrogen future might not be enough to bring the Mirai out of the showroom, as fueling infrastructure is nearly non-existent. The Japanese government aims to bring 100 stations online by March 2015 at the earliest, for what it’s worth.

So, where does the “free car” offer come in? Japanese business daily Nihon Keizai reported on a few suggestions made by a government panel on how to spur FCV adoption rates, including offering free FCVs, free hydrogen refueling and toll exemptions. The daily explained that the government’s hydrogen vision “must contain more radical ideas” in order to generate excitement from the public and “catalyze a revolutionary socioeconomic change.” A hell of a way to push the Mirai for Summerslam, one would suppose.

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US-Korea Free Trade Agreement Results Darken Trans-Pacific Partnership http://www.thetruthaboutcars.com/2014/08/us-korea-free-trade-agreement-results-darken-trans-pacific-partnership/ http://www.thetruthaboutcars.com/2014/08/us-korea-free-trade-agreement-results-darken-trans-pacific-partnership/#comments Mon, 04 Aug 2014 12:00:46 +0000 http://www.thetruthaboutcars.com/?p=881026 Two years after the Obama administration heralded its free trade deal between the United States and South Korea, the latter’s market remains relatively closed to the former’s exports. The Detroit News reports U.S. Senator Debbie Stabenow of Michigan, chairing her first Finance Committee subcommittee on international trade, proclaimed the free trade agreement fell short of […]

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Two years after the Obama administration heralded its free trade deal between the United States and South Korea, the latter’s market remains relatively closed to the former’s exports.

The Detroit News reports U.S. Senator Debbie Stabenow of Michigan, chairing her first Finance Committee subcommittee on international trade, proclaimed the free trade agreement fell short of expectations, noting the increasing deficit between the U.S. and South Korea by 50 percent in favor of the latter party, especially regarding automotive exports:

The agreement aimed to open Korea’s markets to American automakers. But agreeing to phase-out tariffs on U.S.-made automobiles hasn’t been enough. Due to non-tariff barriers, Korea remains one of the most closed auto markets in the world.

Ford vice president for international government relations Steve Biegun, also in attendance, said his employer will sell just 7,000 units in South Korea this year after 20 years of attempts to boost sales. Biegun said access to the Korean auto market remains a challenge, citing regulatory challenges.

This comes on the heels of the Trans-Pacific Partnership, which seeks to do with Japan, the United States and 10 other nations what the U.S. had sought with South Korea. Biegun, CEO Mark Fields and Chairman Bill Ford Jr. warn the deal needs increased measures to hinder Japan’s ability to influence the value of the yen, while Stabenow adds there are “outstanding disputes” on agriculture and automobiles along other “very sticky issues” between all parties involved, especially Japan.

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Toyota FCV To Get “Mirai” Moniker, Hefty Rebates In Japan http://www.thetruthaboutcars.com/2014/07/toyota-fcv-to-get-mirai-moniker-hefty-rebates-in-japan/ http://www.thetruthaboutcars.com/2014/07/toyota-fcv-to-get-mirai-moniker-hefty-rebates-in-japan/#comments Tue, 29 Jul 2014 15:40:31 +0000 http://www.thetruthaboutcars.com/?p=875241 Toyota’s upcoming fuel-cell vehicle will reportedly get the name “Mirai” when it launches in 2015, along with a hefty rebate program in its home market of Japan. Bloomberg reports that the Mirai name has been trademarked in the United States, but the actual name won’t be revealed until closer to its 2015 on sale date. […]

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Toyota’s upcoming fuel-cell vehicle will reportedly get the name “Mirai” when it launches in 2015, along with a hefty rebate program in its home market of Japan.

Bloomberg reports that the Mirai name has been trademarked in the United States, but the actual name won’t be revealed until closer to its 2015 on sale date. The word Mirai is said to mean “future” in Japanese.

Just-Auto is reporting that Japan’s government could offer rebates as high as 2 million yen (about $20,000 at current exchange rates), bringing the Toyota FCV’s pricetag down from 7 million yen ($70,000) to about 50,000 yen ($50,000). The government is also piloting an infrastructure project to bring 100 hydrogen fuel stations to the country by March 31, 2015, in an effort to help spur demand.

Plans are afoot to use the first hydrogen cars as taxis and other service vehicles, as a means of creating broader acceptance and reducing petroleum usage.

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Japanese Government To Push FCVs Via $20k Subsidy http://www.thetruthaboutcars.com/2014/07/japanese-government-to-push-fcvs-via-20k-subsidy/ http://www.thetruthaboutcars.com/2014/07/japanese-government-to-push-fcvs-via-20k-subsidy/#comments Thu, 24 Jul 2014 12:00:56 +0000 http://www.thetruthaboutcars.com/?p=872802 With Toyota ready to make big moves with its 2015 FCV, the Japanese government is ready with their own big move: $20,000 USD in incentives. Autoblog Green reports the government will offer buyers of the hydrogen-powered sedan $20,000 in subsidies, which may bring down the reported $69,000 MSRP down to $49,000; EV subsidies in Japan […]

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With Toyota ready to make big moves with its 2015 FCV, the Japanese government is ready with their own big move: $20,000 USD in incentives.

Autoblog Green reports the government will offer buyers of the hydrogen-powered sedan $20,000 in subsidies, which may bring down the reported $69,000 MSRP down to $49,000; EV subsidies in Japan max out at $8,500 per vehicle for comparison.

Meanwhile, the FCV will likely sell for $50,000 in the United States when it leaves the container ships next summer, and will be joined by Honda’s own FCV — name to be determined later — sometime in 2015.

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Ghosn Top Earner In Japan For Fourth Time In Five Years http://www.thetruthaboutcars.com/2014/06/ghosn-top-earner-in-japan-for-fourth-time-in-five-years/ http://www.thetruthaboutcars.com/2014/06/ghosn-top-earner-in-japan-for-fourth-time-in-five-years/#comments Wed, 25 Jun 2014 10:00:45 +0000 http://www.thetruthaboutcars.com/?p=852041 Renault-Nissan CEO Carlos Ghosn will once more be graced with the honor of being the highest paid executive at a Japanese corporation, having held the honor three previous times in the past five years. Bloomberg reports Ghosn made ¥995 million ($9.76 million USD) in salary and bonuses for fiscal year 2013, which ended March 31 […]

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Renault-Nissan CEO Carlos Ghosn will once more be graced with the honor of being the highest paid executive at a Japanese corporation, having held the honor three previous times in the past five years.

Bloomberg reports Ghosn made ¥995 million ($9.76 million USD) in salary and bonuses for fiscal year 2013, which ended March 31 of this year; total compensation, including dividends, amounts to ¥10 billion ($9.81 million). This puts the CEO ahead of Toyota president Akio Toyoda, who made four times less than Ghosn despite Nissan eking out a profit amid incentive spending and recall costs in the same period. However, Toyoda’s ¥757 million ($7.42 million) in dividends narrows the gap between the two leaders.

Though Ghosn may be killing it in Japan, his total earnings are outgunned by those of his standing among European and U.S. automakers. Outgoing Ford CEO Alan Mullaly earned $23 million in total compensation last year, while GM CEO Mary Barra may receive as much as $14.4 million at the end of FY 2014. Meanwhile, VW boss Martin Winterkorn took home €15 million ($20 million) and Daimler’s doctor Dieter Zetche made €8.25 million ($11.2 million) in 2013. Renault paid €2.3 million ($3.1 million) to Ghosn, bringing total earnings from the alliance to around $13 million USD..

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A Look At A Japanese Auto Auction And What It Holds For The Future http://www.thetruthaboutcars.com/2014/06/a-look-at-a-japanese-auto-auction-and-what-it-holds-for-the-future/ http://www.thetruthaboutcars.com/2014/06/a-look-at-a-japanese-auto-auction-and-what-it-holds-for-the-future/#comments Wed, 11 Jun 2014 12:17:53 +0000 http://www.thetruthaboutcars.com/?p=842114 While we’re fortunate to be treated to a weekly look at American auto auctions courtesy of TTAC’s Steve Lang and his Hammer Time series, today we’re getting a glimpse of an auction on the other side of the world. Prof. Mike Smitka of Washington & Lee University posted an entry at his own Autos & Economics blog, detailing […]

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While we’re fortunate to be treated to a weekly look at American auto auctions courtesy of TTAC’s Steve Lang and his Hammer Time series, today we’re getting a glimpse of an auction on the other side of the world.

Prof. Mike Smitka of Washington & Lee University posted an entry at his own Autos & Economics blog, detailing his trip to an auction near Osaka, Japan. Smitka outlines the differences between American and Japanese auctions, and explains the economics behind Japan’s used car market.

With annual inspections occurring at the ten-year mark, there is usually a flood of 8-year old cars being scrapped or exported. Some years ago, the rather rigorous standards were relaxed, which in turn allowed owners to keep their cars for longer. Even still, there is less supply of older vehicles, and they are usually exported to Pakistan or Russia. Contrast that to America, where the average vehicle age is around 11 years old.

That of course, is bad news for new car sellers, who could typically rely on a steady stream of consumers replacing their cars every decade or so. But as Smitka shows in another post, that trend doesn’t look like it can continue. Between higher consumption taxes, shrinking demographics and a need to trim streamline the OEM retail channels, Japan’s new car market – and its auto industry overall – look to be facing some major changes in the near future.

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Abe Administration Pushes Automakers, Nation Away From Kei Cars http://www.thetruthaboutcars.com/2014/06/abe-administration-pushes-automakers-nation-away-from-kei-cars/ http://www.thetruthaboutcars.com/2014/06/abe-administration-pushes-automakers-nation-away-from-kei-cars/#comments Wed, 11 Jun 2014 11:00:09 +0000 http://www.thetruthaboutcars.com/?p=841985 For ages, the kei car has been one of the darlings of the automotive world, owing to its tiny size and equally tiny engine (that also netted owners a smaller tax bill). Alas, Japan’s littlest cars may soon be put in a toy box destined for Goodwill as the nation’s government puts the pressure on […]

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For ages, the kei car has been one of the darlings of the automotive world, owing to its tiny size and equally tiny engine (that also netted owners a smaller tax bill). Alas, Japan’s littlest cars may soon be put in a toy box destined for Goodwill as the nation’s government puts the pressure on both automakers and owners to move toward supporting bigger offerings.

The New York Times reports the Japanese government introduced three tax increases on kei owners, including a 50 percent boost in the kei car tax meant to bring their tax burden close to larger vehicles. Officials claim the cars are becoming a drain on the Diet’s coffers both on the tax and free trade fronts, and as they cannot be exported to other markets — college campuses withstanding — the keis are a waste of profit and R&D for automakers.

The Abe administration may see push back from owners and automakers alike, however. Smaller automakers such as Suzuki and Daihatsu use the R&D from their kei offerings to better compete in other markets where similar offerings are sold, as well as adding more content to make their cars more attractive to their local market base. Owners, meanwhile, opt for keis because of the low ownership costs involved, and the greater mobility offered in areas where mass transit is few and far between.

The tax increase on the kei has affected both parties, with automakers losing sales and owners who may decide not to buy any vehicle altogether; sales are expected to drop from 2.23 million in 2013 to 1.7 million in 2015.

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Study: 51 Percent Of Chinese Consumers Snub Japanese Vehicles http://www.thetruthaboutcars.com/2014/05/study-51-percent-of-chinese-consumers-snub-japanese-vehicles/ http://www.thetruthaboutcars.com/2014/05/study-51-percent-of-chinese-consumers-snub-japanese-vehicles/#comments Fri, 23 May 2014 11:00:52 +0000 http://www.thetruthaboutcars.com/?p=829337 Though Japanese automakers are doing all they can to win over Chinese consumers, a study led by Bernstein Research found anti-Japanese sentiments among 51 percent of 40,000 surveyed may be a barrier to further success in the growing market. The Wall Street Journal reports the nationalistic attitude toward Japan is highest in developing cities such […]

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Though Japanese automakers are doing all they can to win over Chinese consumers, a study led by Bernstein Research found anti-Japanese sentiments among 51 percent of 40,000 surveyed may be a barrier to further success in the growing market.

The Wall Street Journal reports the nationalistic attitude toward Japan is highest in developing cities such as Changsha, Dongguan and Xian, where automakers hope to strike it rich in the future. Bernstein analyst Max Warburton adds that while the Japanese and their joint-venture parnters will do well in the near future, “the one thing that comes out most clearly is that most Chinese really want a German car… ultimately the market will belong to the Germans.”

In the near term, those surveyed found Japanese vehicles to be less expensive to own and more comfortable than German and American offerings, and superior to vehicles manufactured by South Korean automakers. Nissan, the nation’s largest Japanese brand, was described as being for older consumers with families who have lower incomes than other brands, as well.

Aside from nationalism, the Japanese may also have a hard time breaking into the premium market, with only 41 percent surveyed willing to pay over 300,000 yuan ($48,000) for a Japanese premium vehicle.

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Japanese Automakers Form Alliance To Develop Next-Gen Fuel-Efficient Engines http://www.thetruthaboutcars.com/2014/05/japanese-automakers-form-alliance-to-develop-next-gen-fuel-efficient-engines/ http://www.thetruthaboutcars.com/2014/05/japanese-automakers-form-alliance-to-develop-next-gen-fuel-efficient-engines/#comments Tue, 20 May 2014 12:00:38 +0000 http://www.thetruthaboutcars.com/?p=826666 Japan’s cadre of automakers have formed an alliance to research and develop a new generation of diesel and gasoline internal combustion engines, with the goal of delivering a 30 percent improvement in fuel efficiency by 2020. Automotive News reports the Research Association of Automotive Internal Combustion Engines (AICE) will provide half of the 1 billion […]

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Japan’s cadre of automakers have formed an alliance to research and develop a new generation of diesel and gasoline internal combustion engines, with the goal of delivering a 30 percent improvement in fuel efficiency by 2020.

Automotive News reports the Research Association of Automotive Internal Combustion Engines (AICE) will provide half of the 1 billion yen ($9.9 million) budget for the research and development of the new engines, with the Japanese government contributing the rest. The group structure follows similar paths outlined by their European competitors, where automakers cooperate with academia and government to bring new and improved technologies to market while cutting costs in R&D.

AICE has outlined a 10-year plan for improving efficiency in the combustion engine, targeting a thermal efficiency rate of 50 percent for both gasoline and diesel engines. Diesel R&D will focus on EGR and particulate filtration systems, while R&D for gasoline aims for more complete combustion cycles and improved ignition with knock reduction.

Honda R&D managing officer Keiji Ohtsu will be the first president of the new R&D body.

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Imported Cars Have A Record Year In Japan http://www.thetruthaboutcars.com/2014/05/imported-cars-have-a-record-year/ http://www.thetruthaboutcars.com/2014/05/imported-cars-have-a-record-year/#comments Mon, 12 May 2014 13:16:21 +0000 http://www.thetruthaboutcars.com/?p=819481 Sales of imported cars set a 17 year record in Japan, with brands like Maserati and Volkswagen leading the way, with Bloomberg reporting that non-Japanese brands captured 8.8 percent of non-key car sales – the highest figure since records started being kept in 1989. Mercedes and Maserati both had record setting years in Japan, while […]

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Sales of imported cars set a 17 year record in Japan, with brands like Maserati and Volkswagen leading the way, with Bloomberg reporting that non-Japanese brands captured 8.8 percent of non-key car sales – the highest figure since records started being kept in 1989.

Mercedes and Maserati both had record setting years in Japan, while the VW Golf was the best-selling non-Japanese car, ranking 27th overall. The VW Up! is also said to be stealing sales away from kei car shoppers, and the trend of smaller imported cars appears to be a welcome one for Japanese consumers.

Previously, most European brands imported big, expensive luxury sedans, attainable only to the upper strata of Japanese society. Many of these examples were also left-hand drive, which was considered to be a status symbol by many, in the way that a right-hand drive car has enthusiast cachet in North America (and an inconvenience as well – which was arguably part of the appeal).

But the Golf and Up! have demonstrated demand for smaller, imported premium vehicles, and other brands have been following suit. Mercedes is set to begin sales of the A-Class compact hatchback, while Volvo’s V40 small hatch is the brand’s best selling vehicle.

Nevertheless, it’s unlikely that imported vehicles will ever make up a big part of auto markets in Japan. Despite talk of non-tariff barriers and other obstacles, there are significant cultural hurdles to overcome. Certain American vehicles (like muscle cars and large custom vans) have a following among Japanese enthusiasts, but for the vast majority of consumers, American cars are simply too big and too thirsty for Japan. Witness the boom in European vehicles, which didn’t take off in earnest until smaller vehicles became available. Among Japanese auto makers, kei cars are the dominant segment, with smaller cars taking up most of the non-kei share.

Beyond that, Japan is a society where conformity, not individual expression, is considered a virtue. “The nail that sticks up gets hammered down”, is a constant refrain in discussions of Japanese management culture, and what better way to stand out than by buying a vehicle made by the opposing team? Based on that alone, it’s reasonable to conclude that talk of closed markets and non-tariff barriers are secondary

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Honda S660 To Enter Production In 2015 At Former Beat Factory http://www.thetruthaboutcars.com/2014/05/honda-s660-to-enter-production-in-2015-at-former-beat-factory/ http://www.thetruthaboutcars.com/2014/05/honda-s660-to-enter-production-in-2015-at-former-beat-factory/#comments Wed, 07 May 2014 11:00:37 +0000 http://www.thetruthaboutcars.com/?p=816737 Over two decades ago during the early years of Japan’s Lost Decade (or Lost 20 Years for those who believe the nation’s economy has yet to improve since the boom of the 1980s), Soichiro Honda’s final car before his passing — the Honda Beat kei roadster — left the Yachiyo Industry Company-owned factory at Yokkaichi […]

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Over two decades ago during the early years of Japan’s Lost Decade (or Lost 20 Years for those who believe the nation’s economy has yet to improve since the boom of the 1980s), Soichiro Honda’s final car before his passing — the Honda Beat kei roadster — left the Yachiyo Industry Company-owned factory at Yokkaichi to take on the likes of the Suzuki Cappuccino and Autozam AZ-1.

History could come back around, however, when the factory gears up to build the production-version of the Honda S660 in 2015.

Autoblog reports the Yokkaichi factory — which currently builds the N, Life and Vamos for Honda under-contract — had been slated for expansion a few years ago before the automaker moved the majority of its kei-car production to its own factory in Suzuka.

No word on how many of the new roadsters will be built, nor how much they will be priced; it also remains to be seen if American Honda CEO Tetsuo Iwamura can bring the S660 — or S1000, should more power be needed than the 660cc turbocharged engine mounted mid-ship can provide — to the United States sometime after Japan gets theirs.

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Japanese Auto Market Takes Sales Hit As Consumption Tax Increases http://www.thetruthaboutcars.com/2014/05/japanese-auto-market-takes-sales-hit-as-consumption-tax-increases/ http://www.thetruthaboutcars.com/2014/05/japanese-auto-market-takes-sales-hit-as-consumption-tax-increases/#comments Fri, 02 May 2014 10:00:09 +0000 http://www.thetruthaboutcars.com/?p=813657 The Japanese auto market took a hit in sales last month, falling 5.5 percent to 345,226 units as an increased consumption tax of 8 percent took hold in a sign of a slow year in sales. Bloomberg reports the drop comes at the end of a seven-month-long sales surge of over 783,000 vehicles through March […]

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The Japanese auto market took a hit in sales last month, falling 5.5 percent to 345,226 units as an increased consumption tax of 8 percent took hold in a sign of a slow year in sales.

Bloomberg reports the drop comes at the end of a seven-month-long sales surge of over 783,000 vehicles through March 2014 ahead of the levy issued by Prime Minister Shinzo Abe to help fight the ongoing financial issues plaguing Japan for two decades. As a result, economists believe Q2 2014 will see the biggest retraction since the 2011 Tōhoku earthquake and tsunami.

As for the outgoing month, Toyota and Mazda both posted their lowest number of deliveries since 2011, while Subaru saw a 41 percent drop to a record low number. Meanwhile, Nissan, Suzuki and Mitsubishi all saw gains in April, with Mitsubishi taking the biggest slice of the market at 27 percent.

The consumption tax will be mitigated somewhat for automotive consumers through a 5 percent vehicle-purchase tax, and will give way in 2015 for a 10 percent national sales tax. In the meantime, the next year could play out like it had in 1997, when the tax jumped from 3 percent to 5 percent and auto sales dropped 15 percent with a 21-month decline in the industry.

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At Toyota, Craftsmen Get Hands-On In Search Of Innovation http://www.thetruthaboutcars.com/2014/04/at-toyota-craftsmen-get-hands-on-in-search-of-innovation/ http://www.thetruthaboutcars.com/2014/04/at-toyota-craftsmen-get-hands-on-in-search-of-innovation/#comments Thu, 17 Apr 2014 12:17:45 +0000 http://www.thetruthaboutcars.com/?p=801290 Twenty years ago, as a young Merchant Mariner, I was sent to Japan where the ship I was assigned to, the Sea-Land Spirit, was undergoing a major refit. The ship had begun life as a LASH ship, a vessel that carried cargo-filled barges which it offloaded from its stern via huge, rail mounted cranes that […]

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Toyota factory near hard-hit Sendai. Picture courtesy cbsnews.com

Twenty years ago, as a young Merchant Mariner, I was sent to Japan where the ship I was assigned to, the Sea-Land Spirit, was undergoing a major refit. The ship had begun life as a LASH ship, a vessel that carried cargo-filled barges which it offloaded from its stern via huge, rail mounted cranes that ran on tracks down the length of its deck, and now, after the demise of that business model, it was being converted it into a container ship.

Prior to the refit, the ship had been virtually abandoned, left to rot in some bayside backwater for many years, and it had taken a pounding from the elements. To get it back into service, the ship was towed to Korea where it underwent most of the major modifications, after which it was then taken to the giant Mitsubishi works in Kobe, Japan for the final touches. It was there, so I was told, that Japanese laborers called into question the quality of the Korean’s work. Some of the massive steel braces that had been welded to the deck, they found, were as much as a centimeter off. Shocked by the poor quality of their counterparts’ work, the Japanese shipyard workers cut the braces off the deck, moved them a fraction of an inch and welded them down again.

Photo courtesy of cdn2.shipspotting.com

Photo courtesy of cdn2.shipspotting.com

The Japanese have a reputation for doing things right. Who else could take an iron ore of questionable quality and forge it into blades renowned for their strength, flexibility and sharpness? Who, but the Japanese, could take a pasty skinned, round face little girl and turn her into an object of enduring sexual desire? All cultures make things, but it is only in Japan that the making of things, “monozukuri” is elevated into an art unto itself, and where skilled craftsmen, who spend their entire lives honing their craft to perfection, become “gods.”

In recent years, however, thanks to the amount of production that has been handed over to robots, the number of “gods” on the factory floor has dwindled. Toyota, in particular, has noticed the problem and, according to a recent Bloomberg article, the company if now taking steps to reverse what it sees as a new form of brain drain by taking jobs away from robots and giving them back to men. The logic is slyly simple but infinitely deep, craftsmen, it goes, will always look for ways to innovate, always seek out easier more efficient methods and even find ways to reduce waste while robots can only do what they are programmed to do.

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Over the past three years, the article continues, Toyota has introduced more than 100 “manual-intensive” workplaces at factories all around Japan. In one of the sections, men manually turn and hammer red hot steel as it is forged into crankshafts in much the same way that Henry Ford’s workers once did. True to form, the men in the section have been watching and learning and the result of their efforts has been a 10 percent reduction in material waste and a shortening of the production line that will soon be applied to the automated processes used to make crankshafts in the next generation Prius Hybrid.

There is no doubt that the robots are here to stay, but Toyota’s recent experiments show that keeping humans closely engaged in the process can pay real dividends. By empowering workers and encouraging them to become skilled craftsmen who truly understand what it takes to build cars, Toyota is setting the stage for innovation. It is, I think, a uniquely Japanese solution but it could be applied here in North America as well. Despite the many people who decry the lack of skills and poor work ethic of the North American factory worker, I believe that there are a great many men and women in our factories who would jump at the chance to work harder. Everyone, I think, wants to be valued and most people want to make a difference. This could work here too, maybe some of our own best and brightest should take a look at what’s going on.

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Analysis: Australia’s Free Trade Deals Are The Final Nail In The Coffin Of Its Auto Industry http://www.thetruthaboutcars.com/2014/04/analysis-australias-free-trade-deals-are-the-final-nail-in-the-coffin-of-its-auto-industry/ http://www.thetruthaboutcars.com/2014/04/analysis-australias-free-trade-deals-are-the-final-nail-in-the-coffin-of-its-auto-industry/#comments Tue, 08 Apr 2014 15:35:19 +0000 http://www.thetruthaboutcars.com/?p=790321 In the span of 24 hours, Australia inked two free trade agreements with both Japan and South Korea. Even though Holden, Ford and Toyota had already committed to ending auto manufacturing in Australia, it’s hard not to see the agreements as the last nail in the coffin of Australia’s once strong auto industry. Although North […]

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In the span of 24 hours, Australia inked two free trade agreements with both Japan and South Korea. Even though Holden, Ford and Toyota had already committed to ending auto manufacturing in Australia, it’s hard not to see the agreements as the last nail in the coffin of Australia’s once strong auto industry.

Although North American perception of Australia’s car market is one composed of big, rear-drive V8 sedans and Utes, that image is largely a construct in the minds of enthusiasts. The real picture is a lot less sexy.

Australia’s market is both unique and remarkably mundane. At around 1 million units annually, Australia’s new car market is a mere fraction of the United States – but it’s also far more competitive, with roughly 60 brands competing for a very small pie.

In past decades, the local auto manufacturing industry was heavily protected by tariffs, which encouraged a thriving domestic auto manufacturing industry. Holden and Ford ruled the roost, while Chrysler enjoyed a brief run of localized cars. Later on, companies like Mitsubishi, Nissan and Toyota joined the fray, establishing themselves as the favored Japanese brands.

But in 1983, the Button Plan radically changed the automotive landscape in Australia. The chief goal of the Button Plan was to consolidate the domestic auto industry by halving the number of model produced, while also looking to reduce tariffs and import quotas. The overall goal was to foster a more competitive, export-focused Australian car industry through increased competition.

In the immediate term, a number of badge engineered domestic models appeared in the showrooms of Japanese brands, but none sold particularly well. For a long time, traditional Australia vehicles like large sedans and Utes reigned supreme. But the past decade has seen a major shift in the automotive market, with rapidly changing tastes.

Much like their cousins in the United States, Australia’s traditional vehicles – large sedans and Utes – are facing a two-fronted war, and the outcome has all but been decided.

A report by Ward’s Auto shows that in 2003, large sedans (which ostensibly includes not just the Holden Commodore and Ford Falcon, but also front-drive entrants from Toyota and Mitsubishi) were the most popular cars in Australia, with 26 percent market share. A decade later, that number has fallen to just 7.6 percent.

Small cars and SUVs have overtaken the large car as the most popular segments in Australia. Rising fuel prices, shifting market tastes and a greater selection of small cars have helped propel vehicles like the Holden Cruze, Mazda3, Hyundai i30 to the top of the sales charts – to say nothing of the Toyota Corolla, which was Australia’s best-selling car in 2013.

At the other end of the spectrum, SUVs, crossovers and mid-size pickup trucks have eroded the large sedan’s domain as the family car of choice, with Ward’s reporting that one fifth of buyers are opting for mid-size or large SUVs. The Toyota HiLux was Australia’s best-selling truck in 2013, as sales of mid-size trucks (including Holden’s popular Colorado) helped dampen enthusiasm for Utes.

Beyond the lack of enthusiasm for traditional vehicles, the importance of Australian pedigree is on the wave. As Ward’s reports, the preference for Australian-made vehicles has declined substantially from over a quarter of new buyers in 2003, to roughly one eighth in 2013. Last year marked the first time that the three most popular brands in monthly sales rankings (Toyota, Mazda, Nissan) were all imports.

With a changing climate regarding imported vehicles, the FTAs with both Japan and South Korea will only reduce the cost of vehicles that Australian consumers are already gravitating to. While the FTA with Thailand arguably served as the catalyst for Australia’s major market shift towards Thai-built trucks and certain passenger cars, other factors, like a strong Australian dollar, high manufacturing costs and limited export demand for Australian cars (despite the protestations of enthusiasts across the internet) did their part in bringing about the inevitable end to Australia’s auto industry. The Japanese and South Korean FTAs won’t do any more harm to an industry on death row. But it’s impossible to ignore their symbolism in the wake of the Australian car industry’s annus horribilis.

 

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