By on March 24, 2009

Let's get small. Picture courtesy geocities.com/the_narc_2000

As the Japanese fiscal year draws to a close on March 31, The Japan Automobile Manufacturers Association (JAMA) is already looking forward. And there’s a decline ahead. JAMA expects domestic sales of automobiles, including minivehicles, to slide 8 percent from the (not yet announced) level in the current fiscal year to a 32-year low of around 4.29 million units in fiscal 2009, the Nikkei [sub] writes.

If their projection is accurate, domestic auto sales will be just about half of their former 7.8 million glory reached in fiscal 1990. It was downhill from there.

Japan is expected to close out the current fiscal year with al 12 percent minus. 4.66 million units are expected to be sold, a level not seen in 28 years.

Get the latest TTAC e-Newsletter!

20 Comments on “The Incredibly Shrinking Japan...”


  • avatar
    hazard

    Japan is a country with a ridiculously low birth rate, an ageing population and with very strict and closed immigration policies: in the future, the number of people in Japan will go only one way: down.

    Since Japan is already highly developed, this means its car market (or economy, for that matter) can’t grow. There just aren’t – and won’t be – enough buyers.

  • avatar

    Very true. Something similar is hjappening in Germany also, btw.

  • avatar
    mel23

    But doesn’t Germany have a LOT of immigration?

  • avatar
    Kevin

    I’ve been preaching this for three years, since I started paying attention to the automotive market. From a strictly objective standpoint, it will be fascinating to see how the Japan economy unfolds in this first country in the history of Earth to die of old age. I’ve been wondering if it’ll be a gradual fade or if there is some tipping point where things seriously implode.

    Or, maybe in the end they’ll surprise us with some kind of rejuvenation in birth rates or immigration. I keep offering to stud myself out to the ladies of Japan if that’ll help.

  • avatar
    hazard

    Germany does have more immigration. And as Europe’s largest economy, it can more easily “suck in” people from the less-developed EU countries (which have the same if not worse birthrate problems and much less immigration).

    As for birthrates picking up, even if they do rebound in say 10 years – this still means Japan would lose population – but instead of “dying of old age”, it would stabilise at a new equilibrium level. Which in the end, might not be so bad. The transition to that level however, just might be. The economic system which we have is dependent on growing. What happens when you get very negative GDP year after year? Who will pay off all the debts accrued? (Japan is one of the most indebted nations nowadays)

  • avatar
    wsn

    I view that as a good thing. A university graduate that started work in the late 80s couldn’t even afford a 300 sqft condo without a lifetime of mortgage payments.

    Now, it’s much easier to afford a condo and/or a car. Real estate price drops more than the wage drops.

    On the other side, China is having 8% GDP increase in a recession. Their new grads can’t afford shxt. They earn 2k (Chinese Yuan) per month, and the average condo price is 2k/sqft in Shanghai (500, in a small city).

  • avatar
    akear

    I envy their auto industry. They have at least 5 carmakers, all of which are healthier than the US carmakers.

    Toyota and Honda would never go to Daewoo for a car like the Cruze. They have too much pride in their own engineering and design to take that route. On-the-other hand Way-goner and Putz have no pride and give us excrement like the Aveo.

  • avatar
    GS650G

    Japan has ridiculously strict inspection for cars, you don’t see any old one’s very much. BUt cars also cost a fortune to drive, park, insure and fix. Tickets are insane ( 300 – 900 for a parking ticket)and the toll roads start at 8 dollars for one exit. It can cost over 120 dollars to go from Sendai to Tokyo just for the road toll.

    So why would people want cars in a country where public transportation, even in the rural areas is everywhere? They are to be commended for this mass transit system but it makes their car industry susceptible to exchange rates and foreign economies.

    It’s not a bad thing that the US has adopted the transplants. They end up closer to their target markets, have a labor pool to draw from, enjoy lower costs and faster time to market.

  • avatar
    jurisb

    Thanks God, Japan limits immigration. Thanks to that they are the best engineering nation in the world. If those Marantz stereos and Lexus sedans were assembled by immigrants, most likely they would have lost these companies already. At least Japan doesn`t borrow money from abroad to waste it on buying imported goods. Interestingly, what happened to the famous german reliability with influx of 4 million turkish workers?

  • avatar
    akear

    Japan and Germany have the best engineering because they don’t outsource their know-how. It has absolutely nothing to do with race or national origins.

    America’s racial diversity has actually helped it become the world’s innovation capital. Unfortunately, we probably won’t see this innovation in our helpless auto industry.

  • avatar
    wsn

    jurisb :
    March 24th, 2009 at 1:02 pm

    Thanks God, Japan limits immigration. Thanks to that they are the best engineering nation in the world. If those Marantz stereos and Lexus sedans were assembled by immigrants, most likely they would have lost these companies already. At least Japan doesn`t borrow money from abroad to waste it on buying imported goods. Interestingly, what happened to the famous german reliability with influx of 4 million turkish workers?
    —————————————-
    Well if immigrants caused all the problems, then please tell me, who caused the problems at D3?

    The African Americans workers? Because they are inferior to Caucasians, just as Turks are inferior to Germans? Is that what you are implying, or what?

  • avatar
    wsn

    akear :
    March 24th, 2009 at 1:13 pm

    America’s racial diversity has actually helped it become the world’s innovation capital. Unfortunately, we probably won’t see this innovation in our helpless auto industry.
    ———————————————
    We won’t see it, as long as companies are not allowed to fail.

    Remember, we humans rule this earth only after the demise of dinosaurs (thus giving mammals a chance). If super powerful alien nannies bailed out dinosaurs back then, there won’t be human beings.

  • avatar
    quasimondo

    jurisb,

    I’ll assume you were out sick in that economics class that discussed Japan’s Lost Decade of the 90’s. A decade where the government borrowed massive amounts of money to build roads and bridges and airports to nowhere. A decade where at last count, that fine island nation now has the highest national debt of all industrialized nations, to the tune of ¥836,521T ($8,542T), or 194% of total GDP.

    Sure, that debt was financed by its own citizens, but debt is debt and unless the Japanese government’s debt reduction policy is to wait until their citizens die off and hope their next of kin forgives the debt, that’s one helluva hole they’ve dug themselves in.

    You must’ve also been out sick during the discussion that discussed Japanese universities biting their nails over the exodus of students from science and engineering majors to other non technological fields, making it a very real possibility that Japan will lose their hard-earned reputation for engineering excellence.

    But don’t worry, notes were taken for you:

    http://www.economicshelp.org/blog/economics/list-of-national-debt-by-country/comment-page-1/

    http://www.nytimes.com/2009/02/06/world/asia/06japan.html

    http://www.nytimes.com/2008/05/17/business/worldbusiness/17engineers.html?pagewanted=2&_r=1&sq=japan%20engineers&st=cse&scp=1

    So go ahead and crown over their xenophobic immigration policy that’s slowly strangling the country. Obviously, everything is just simply peachy in the Land of the Rising Sun.

  • avatar

    Pls cut out the racist remarks – or else.

  • avatar
    07Frontier

    During my three-year stay in Deutschland on Uncle Sam’s dime, I was surprised at the number of immigrants. Turks, Iranians, Greeks, Scots, Brits. We had to keep the Turks and Greeks on separate shifts, though…if they were near each other they got feisty. The Turks were the hardest workers; the Scots and Brits were the most fun to go drinking with.

  • avatar

    Folks, keep in mind that citizens of EU countries may work and live wherever they damn please within the boundaries of the ever growing EU. Greeks, Scots, Brits working in Germany don’t count as immigration. Whether it’s Glasgow or Günzburg, with an EU passport, it’s all the same.

    Also, FYI, Japan has (or make that had) a lot of guest workers from other countries. On temporary contract assignment, and promptly shipped back home when the going got rough.

  • avatar
    joeaverage

    It’s not about the race of people – it’s their culture.

    In short does any given group of people give a damn? I think America is in danger of being in this position. Not making careful choices, not really trying very hard, etc.

    Maybe I’m just showing my age and EVERYBODY who does give a dman and goes to work everyday gets to a point where they think they see two generations of people younger looking pretty sorry. Maybe this happens about the same time a person thinks they understand their world a little better (reading, listening, looking around, who’s getting into trouble, why and where they live).

    Prob just a bad case of busting my hump while looking that those sorry souls wasting time and money…

    Anyhow I don’t see any potential American woes defined by colors or regions. I think folks in general have gotten too complacent, too comfortable. Folks at one end of the economic spectrum think somebody owes them something, people at the far other end thinking people are their’s to use up and throw away, and people in the middle have their problems too – witness the mortgage implosion.

    We ought to watch Japan and parts of Europe – like Italy – where the there is a negative birthrate – and learn something. Whether those lessons are what to do or not to do remains to be seen.

    I can’t help but think we’ll be in the same boat IF immigration slows. I know plenty of 30-somethings who are skipping children all together because of the cost and what they see as a hassle factor. Heck, my wife and I have spent $50K on childcare for two children… Wouldn’t trade the kids for the cost but the cost is noteworthy to those who teens who might be messing around and not being careful…

  • avatar
    07Frontier

    We don’t have a problem with negative birth rates. There were more babies born in the United States in 2007 than any other year in history, even surpassing the record in 1957: http://www.nytimes.com/2009/03/19/health/19birth.html?_r=1

    This bodes well for our economy. In a few short years, these people will be consumers. It also means more money to provide for my social security and Medicaid.

  • avatar
    jurisb

    racism is a negative prejudice towards an ethnic group without substantiation.if I deal with facts and stats , I am not a racist. It is quiet simple, the biggest tangible value within any country is usually connected with highly skilled workers and technologies( productivity plus income division). Any country that has shown their ability to create such technological values, most likely will benefit in financial parity and will eventually improve their infrastructure and living standards.When you mention equality, What do you mean by that? Do you expect that an MIT engineer should equally split his income with a Mart sales clerk?No! Equality means, equal division of income ACCORDING TO THEIR INPUT! Blacks are 2 times more likely to be unemployed, 3x more likely to live in poverty, more than 6x likely to be imprisoned than white people( CNN,State of Black America, March 26,Cnn Money, CNN.com.). Nobody discards black people because of their color, because every enterpreneur is hiring their staff according to their productivity and trouble-proof record. I would hire even an alien EBE Jayrod if he did his job well.So , some ethnicities are rather likely creating problems themselves, than getting them from elsewhere. One reason is subpar IQ, meaning average test scores for certain ethnicities are lower on average, thus prohibiting them to enter Universities and colleges. This leads to decreased employment, increased crime and poverty.If no nationality has predominance towards technical engineering, how come that Japan excels at it, but Namibia doesn`t?
    By the way, Quasimondo, Japan is accumulating huge trade surpluses, in excess 0f 120bn$ annually, and her debt is not external, meaning she doesn`t owe the debt to other countries. And , oh, boy, how wrong are those people that think that innovations don`t come from japan, and those who think jpanese copy euroopean cars are even more dilussional. Japan is the God in industrial robots, car building, consumer electronics and many other branches, thanks to her consolidated philosophy of long term-planning and product-comes-first strategy.If certain nations can`t organize meaningful manufacturing at their own countries, what makes you think that they would do it when flocked together in another? Just because you can find exceptions, doesn`t disapprove the stats itself. The secret is the percentage. What percentage of population within a due nation is likely to receive doctor`s degree in natural sciences as compared to a percentage of population to receive the same degree in naother nation or ethnicity group?

  • avatar
    joeaverage

    And some groups of people value education MUCH more than others. This isn’t a comment on race, it’s a question of culture.

    An 18 year old kid who has avoided getting any education his whole life is going to have a hard time in college. Alot of catching up to do… He likely is not as sophisticated as the kid that goes home to hear intelligent conversation between family adults, who has high(er) brow magazine laying around the house to read, whose parents can introduce their kids to the finer things in life and what it takes to continue that lifestyle as an adult.

    Listen I live in a small southern town where there are few blacks. What we have plenty of are white people who don’t value education. They go onto small jobs, small pay, small houses, and small bank accounts. They avoided the positive effects of learning a few things, valued all things not school, and a few ridiculed those who did want to learn some “stuff”. Sometimes I can look at a person and their life and pick out dozens of indicators to why they live like they do. Not stereotypes – choices that took them down a more basic lifestyle…

    We’ve got friends in the education system here who tell us about their biggest challenges at work during dinners and playdates. These usually come in the form of white rural kids with the same problems as inner city black youth. Same excuses. Same choices. Same backgrounds. Same outlook on life. Same problems. Same futures. The only real difference is the environment maybe rural instead of urban.

    What sets Japan apart from other countries is (I think) that they value their engineers and other technical people. When those same people were 12-15 yrs old those people were likely the geeks and nerds of grade school. I know when I was in HS in the 80s the geeks and nerds were tormented constantly. The athletics folks got way more support and “glory” from the school and administration than the science kids. Want to fix education? Separate athletics from the public school system. Let those kids play ball on the weekends and afternoons through community teams – not school teams. It would likely save ALOT of money too.

    I have a child going through grade school now. He is a mild mannered type of kid inclined towards things technical and science. He’s embarrassed to ask questions in class b/c some of the other kids give him a hard time about it on the school playground. They don’t value their education. They ridicule anyone who does. We work with him in the evenings to fill in any “blanks” in his instruction for the day. Would the school admin “protect” him? Not very well. Just enough to cause him more troubles with those kids.

    This is one example of small minds holding back better minds. We need those better minds to be given a little of that school glory normally reserved for guys who play games with a ball and the pretty girls who cheer them on.

    In this country there is too much value placed on athletics (school and pro), consumerism/affluenza, and celebrity. In the end this may well be the end of us as American expertise is replaced with Indian, Chinese, or simply Asian expertise.

    If there is anything that might set private schools apart I suspect it would be a much higher percentage of parents and students who value education in any given private school. People spending big bucks for an education for their children may have their priorities in better order. Alas, no private schools in this area aside from a religion “academy” and they are not the types of people I want teaching my child…

Read all comments

Back to TopLeave a Reply

You must be logged in to post a comment.

Recent Comments

  • EBFlex: “ On the flip side, when I call people cheese d!cks or s#!+heads, you guys want a ban soooo….” Rules for thee...
  • tonycd: Nice.
  • tonycd: “With the overwhelming evidence that lockdowns (and masks, and even rushed, emergency use vaccines)...
  • SaulTigh: I wonder how they count those? In 1995, the corner store was a thousand square feet and had 2-4 gas pumps....
  • la834: Tesla also built their own charging infrastructure that only works with Teslas, and in some areas they are the...

New Car Research

Get a Free Dealer Quote

Who We Are

  • Adam Tonge
  • Bozi Tatarevic
  • Corey Lewis
  • Jo Borras
  • Mark Baruth
  • Ronnie Schreiber