Abe Administration Pushes Automakers, Nation Away From Kei Cars

Cameron Aubernon
by Cameron Aubernon

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.

Cameron Aubernon
Cameron Aubernon

Seattle-based writer, blogger, and photographer for many a publication. Born in Louisville. Raised in Kansas. Where I lay my head is home.

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4 of 23 comments
  • Stephen7 Stephen7 on Jun 12, 2014

    The most notable difference when sitting in a kei car is the narrower width. There is usually no center console and the shifter is mounted on the dash. 6" is more than you might think. But you are right, if kei cars were to disappear most Japanese would likely only move up into a B segment car which are already the best selling segment in Japan behind kei cars. And they already have smaller engines than the same model would have for export. For example the base engine in a JDM Toyota Vitz is a 1.0 while the Yaris here in the US has a 1.5L.

  • Jeff S Jeff S on Jun 12, 2014

    I would much rather have a Kei than a Smart Car. Looks a lot more usable and probably is less expensive. Better fuel economy.

  • Daniel g. Daniel g. on Jun 12, 2014

    Hi guys, I got experience with a daihatsu new move from 2000, driver + passenger in front seat is almost the same size of vw bora/jetta, plus variable configuration of back seats, very confortable litle car. Aerodinamics like a brick but confortable in the city with 1000cc 3 cyl engine. Brand new in 2000 almost US$ 11000, good fuel economy. Ohh this in argentina.

  • Roland Roland on Jun 15, 2014

    Fuel imports are already killing Japan's balance of payments. Abe is a fool.