In the early 1980s, as the economy continued to slump and gas prices soared, American car makers were desperate for a way forward. The good old days were gone forever. Under pressure from the Japanese, whose small cars had gone from rolling jokes to serious, high quality competition in little more than a decade, the big three knew they needed to make a radical departure from their traditional approach before it was too late. Although some of the more stodgy cars would soldier on and continue to sell to members of the Greatest Generation well past their expiration dates, for the rest of us the future was a smaller, lighter and more efficient. The winds of change were blowing and even the Ford Mustang felt the chill.

Nissan is the largest of all Japanese automakers in China, and therefore has the most to lose. With about a quarter of its global sales in China, Nissan has the highest exposure to the ups and downs of the Middle Kingdom. When Chinese rioted in the streets, overturned Japanese cars and torched their dealerships , Nissan was beaten hard. At one point, sales of Nissan cars were cut in half.

Recently, the situation has improved a bit. Nissan’s April sales in China even booked a slight increase over April 2012. A month and a couple percent do not make a trend. Says Ghosn:

If any carmaker is hoping for an imminent turn-around in Europe, or is telling shareholders (I am looking at you, GM) that better times will be here again real soon now, then Nissan’s CEO Carlos Ghosn has a bucket of ice-cold water for them.

“Europe is going to be bad,” Ghosn predicted today in Yokohama. Ghosn also serves as CEO of Renault, a company that is taking major lumps in a market that has been careening south for five years in a row now. One would assume that a man in his position paints a rosier picture. Instead, Ghosn’s pallet is all gloom.

Ghosn knows what is on the mind of the European customer:

If you wanted to have a ten minute advantage (for placing those jumbo derivatives order into the mainframe of your hedge fund) before Nissan’s annual results for the last fiscal were announced in the newly redecorated meeting room on the 8th floor of their Yokohama headquarters, all you had to do was read the smiling faces of Nissan’s top lieutenants. Executive VP Andy Palmer was all grins.

Toyota’s CEO Akio Toyoda threw another bucket of cold water on wild fantasies of autonomous cars. Instead of developing cars that drive themselves, Toyota is thinking more of cars that assist you in driving.

Found around the corner from Toyota

It’s not quite the all clear, but Japanese automakers (and their government-owned Chinese joint-venture partners) breathe a bit easier after receiving April sales numbers for China. Numbers had been down severely after last September’s anti-Japan riots. Latest “figures suggest that the firms are closer to recovering their lost sales,” says The Nikkei [sub].

By now, most of you who care about these things are aware that Toyota today announced an annual net profit of $9.73 billion for the fiscal that ended on March 31, more than three times of what the company made in the year before. By now you probably heard that the “weaker yen” is the reason. Not really, says Toyota, claiming that “effects of FOREX rates” added only $1.5 billion to the bottom line. There is another number you may not have heard.

The mantra before, during, and after the bailout was (and still is) that without the bailout, gadzillions of jobs would have vanished, the American car industry would have been wiped out, wheels would have come off the arsenal of democracy, and the sky would have fallen into Lake St. Clair. Of course, that’s nonsense. There are more than enough other carmakers in America. They would have received the sales, and added the jobs. They would have been mostly non-union jobs though.

The truth is, without the bailout, the UAW would have vanished, and with it millions of Democratic votes.

There probably is no other major car market where oil-burners play less of a role than in Japan. Even diesel-averse Americans buy more. Excitement about brown diesel wagons notwithstanding, diesel-powered cars limp along at around 3 percent market share in America. In Japan, where diesel-powered cars were banned from the streets of Tokyo 14 years ago, and where they carry the onus of being smelly, their market share is below miniature one percent. In both markets, there are hopes for a big diesel turn-around.

In some ways my initial move across the Pacific was a lot easier than my return. I was at the end of my personal rope when I went to Japan in 1999 and, even though I was stepping into a dead end job, there was nowhere to go but up. Coming home was quite the reverse. Of course I had a job offer, but I had learned the hard way about birds in the hand versus the two in the bush and, truth is, I was scared. I had carved out a nice little life for myself in Japan. I had friends, a decent place to live and, for a change, money in my pocket. I had even purchased a car and a motorcycle, but now it was time to sell out and move on.

April sales in Japan were up 1.5 percent in April, with sales of kei cars lagging behind resurging regular cars while imports surprise.

The retreating yen allowed Honda and Mazda to report bigger profits for the last quarter of their April to March fiscal year. Now the two are faced with a new problem, one that will also be shared by its Japanese peers: Higher costs of badly needed foreign investments.

Folks who are not intimately familiar with the peculiarities of the European auto industry often call Renault a similar basket case as its French rival Peugeot. January through March, both are down in Europe, PSA (-15.3 percent) more than Renault (-8.3 percent), but the big difference is that Renault has a much wider international footprint. What’s more, Renault owns 44.3 percent of Nissan. This international footprint helps Renault solve problems in ways Peugeot can’t touch. For instance, by making Nissans.

As predicted by TTAC after Chinese demonstrations against Japan’s control of the Senkaku/Diaoyu islands turned into violence against Japanese cars and car dealerships in China, the matter turned into a severe sales setback for Japanese car companies in China, more severe than initially thought, or hoped . Also as predicted by TTAC, the islands did affect the sales of Japan’s carmakers more than the tsunami. Last Saturday in Shanghai, Toyota’s China chief confirmed that the pain would be felt at least through August. This was before he heard the really bad news.

In the past, Toyota had tried to resist the urges of the Chinese government to establish new joint-venture brands. The company also had been highly skeptical of the viability of the electric vehicle. All doubts have been tossed over board. Toyota launched two new brands and two new EVs in China.

Now that the U.S. and Japan have agreed on a watered-down version of the Trans-Pacific Partnership trade negotiations (America will keep its beloved chicken tax for at least another decade, Japan will protect its rice farmers from the evils of cheap American rice,) negotiations between the EU and Japan about a trade pact are getting underway, with considerably less drama.

“Japan effectively sealed its participation in Trans-Pacific Partnership trade negotiations Friday after reaching an agreement with the U.S. over its entry into the talks for the emerging regional free trade pact,” says The Nikkei [sub] .

Honmoku street is a wide, tree lined avenue that bends through the southern “Naka” district of the city of Yokohama. Close by sits the massive port, the gateway through which so much of Japan’s industrial output is sent to the world, its tall cranes working ceaselessly and with no regard for human concerns like the time of day. Above it all the Yokohama Bay Bridge soars like a vision, lifting cars and trucks across the entrance to the harbor as effortlessly as it straddles the line between art and infrastructure. Although the massive bridge and its double decked feeder highways encircle the entire district, the sense one has on the ground is of open space and nature, rarities in the second largest city in Japan. In the midst of it all sits the classic American Hot-Rod shop, Mooneyes.

Ferrari abandons its trademark red for a limited-edition version of the California 30 convertible targeted at the Japanese market.

Have you experienced panic attacks due to a wayward and unfindable car key? Toyota’s parts arm Denso is here to help, for a 3,980 Yen ($41) fee. That’s the JDM cost of Denso’s key finder, a small receiver with a buzzer and a LED light that can be wirelessly activated by a smartphone via Bluetooth.

For anyone like myself – that is, a car fan who grew up in the 1990s and watched Japan’s sports cars disappear from the American market in one sudden swoop, news that Japan’s once mighty auto industry is being “hollowed out” might come as a shock. The cars that defined my youth – the RX-7s, Supras even the VTEC Honda compacts, are a distant memory. Most of what Japan offers on our shores are aimed at the mainstream, while at home, kei-cars and hybrids dominate the market.

A lot of the criticism leveled at Japan is that their focus on the mainstream market and alternative powertrains is what sparked their auto industry’s current malaise. But this is a superficial and fallacious assumption that supposes that the glut of superb Japanese cars in the 1990s is a baseline for our expectations of what a Japanese auto maker should be building and selling. In fact, it is an aberration that will never occur again.

Somebody Say I look like an old woman?

Yesterday I shared with you dear, reader, one of my favorite games, the $5000 Craigslist Fantasy Challenge and you responded with a lot of great cars. Today I thought I would step it up just one more notch and introduce you to that game’s Japanese cousin – the “Goo Game.” Won’t you come and pray with me?

They may not have western-style unions in China, but workers sure do strike. Workers at Honda’s transmission plant in Foshan, Guangdong Province, walked off the job on Monday after their pay increases weren’t as large as they had hoped.

It’s not just the UAW that is upset about free trade agreements. The Koreans are likewise. The offices of the Korea Automobile Importers and Distributors Association were raided by investigators of the country’s Fair Trade Commission, the Financial Times reports. The agency alleges that BMW, Mercedes-Benz, Volkswagen and Toyota Motor were involved in price collusion.

Typical Japanese Highway scene

Total silence is not the kind of thing you expect in Japan. Given the fact that there are almost 130 million people crammed into a country roughly the size of the State of California, only 20% of which is actually habitable, the din of human activity follows you wherever you go. It is an incredibly urban environment, filled with people, heat and activity. Yet when I turned off the engine and stepped out onto the empty road and into the cool stillness of the summer night, I felt like I was the only person in the world.

Attentive readers of TTAC have known it since the Beijing Auto Show last year that Toyota will launch a separate brand for its “new energy” (read plug-in hybrid and EV) that are produced in China. A not quite officially announced, but de facto policy wants it that way. Now we have the brand. It’s called Ranz.

When Toyota gets on the horn by lunchtime to tell Tokyo’s media to show up at 4:30 the same day, everybody knows it will be a big surprise and an even bigger deal. Today, Japan’s Fourth Estate already knew what’s coming when the phone rang. It still was a big deal: Toyota completely reshuffled its top executives. It even brought a non-Japanese on board, a former GM man to boot.

My TDI in Japan

The engine quit with a sudden un-dramatic snap, and the little Golf TDI began to slough off speed. Reflexively, I bumped the gearshift lever into neutral, flicked on my signal and began moving towards the left edge of the expressway. My exit was less than a mile away and, rather than stop alongside the highway, I used my momentum to coast up the off-ramp and over the small knoll that stood between the expressway and the toll plaza. I stopped there, on the back side of the hill where the road widened on the approach to the toll booths, to avoid blocking traffic and dug out my cell phone to call for a tow truck. I didn’t know it then, but it was the last time that I would ever sit behind the wheel of the little car, never mind the fact that it would follow me again around half of the globe.

As expected, sales of Japanese cars in China took a nosedive to levels not seen since the days after Japanese cars and dealerships were torched last September. Sales of Nissan and Toyota are down a whopping 46 percent. No, it’s not a new flare-up of anti-Japanese riots. This time, it’s the effect of the Chinese Lunar calendar.

My 1986 JDM Twin Turbo Supra

Wherever I am in the world I will always be a typical American man. Despite a lot of the stereotypes that spring to mind when I say that, I learned a long time ago that it isn’t a bad thing. I was raised right and I have solid values. When seats are limited I will stand so my elders can sit. I always hold the door open for ladies, and I keep plugging away no matter how hopeless the situation might seem. There are a few things here and there that can cause problems once in a while, too. For example, I won’t be deliberately insulted, I need my personal space and, of course, I feel like I am loser if I don’t have my own set of wheels.

Japanese automobile sales were down eight percent in February 2013, compared to the same month in the prior year. This according to consolidated data by the Japan Automobile Dealers Association and the Japan Mini Vehicles Association.

A weakening yen and a rebounding economy have occurred just in time for Honda. The auto maker is opening its first new Japanese plant in 49 years, bucking a trend by Japanese auto makers of opening new plants in every locale but Japan.

BMW has its M-series, Mercedes has its AMG, Audi has its R. Now, Nissan has its NISMO. Like most in-house speed shops, NISMO has its roots in a factory racing department. “NISMO is the first true performance brand of Japan’s major makers,” as Nissan’s marketing chief Simon Sproule tells me at NISMO’s new headquarters in Tsurumi, near Yokohama, today. “The others are only playing around.”

Invitation here

Jalopnik is making a big do about “NISSAN’S NISMO IS PLANNING A BIG ANNOUNCEMENT ON MONDAY.” And the Jalops wonder: “What could it be?” It might be the start of a large multinational co-operative project between Jalopnik and TTAC. Or not.

They can cuff me anytime.

Hot girls in short skirts are the first things that leap into my mind whenever anyone says anything about the Japanese. The internet has not helped to change that, in fact it may have made things worse. If you add the word “Japanese” to any noun that describes a group of people and enter it into your favorite search engine, pictures of hot young girls will always appear near the top of the results. Look for Japanese tour guides, Japanese students, Japanese beach volleyball players or Japanese anything and you will see I am right. Try it, I’ll wait.

Now that you’re back, did you look for Japanese Police? I did, and despite my prior confession I was surprised at what I found.

Do you want to set a new world record and get you name into the Guinness Book? Nothing easier than that. Simply build a billboard with more than 183,024 LEDs and measuring over 28.0 meters in length and 6.2 meters in height, thereby exceeding a surface area of 174 sqm, and the world record for the largest illuminated advertising sign (indoors) will be yours. Until you do that, the record holder will be Nissan.

Toyota will make in the neighborhood of 10 million units this year, but plans on a big push for 2014 that will propel it way beyond the 10 million mark.

For those of you with a love of geography but without the resources to actually set foot in the country, let me tell you about Japan. It is a nation famously made up of thousands of islands but, in reality there are just 4 main islands where most of the people live – 5 if you count Okinawa. The largest island is called Honshu, it is the banana shaped one in the middle should you be looking for a map right now, and Honshu is home to most of the great cities of Japan. Tokyo, Kawasaki and Yokohoma blend seamlessly into one another to form one giant zone of dense urban sprawl across the “Kanto” region in the East, while Kyoto, Osaka and Kobe mirror that sprawl, albeit with less size but more attitude, in the West. This Western region is known as “Kansai.” I’ll take you to to Japan’s flyover land. The land, where one would fly over guardrails.

At TTAC, we showed you the secrets of how to make a supercar. But what about the real top secrets of a car company, like its earnings? This is insider information, trading on which could make you rich, or poor. It also can land you in jail for a long time. TTAC takes you to the inside of how a car company prepares for an earnings press conference.

Dan Sloan is tired. The head of Nissan’s Global Media Center in Yokohama got up at 6am this morning after days of not much sleep. Today is the day when Nissan’s third quarter earnings are to be announced to the press, and the world at large. It will be a long day of preparations for the big announcement in the late afternoon, and TTAC will be the fly on the wall. Or, as Sloan predicted, the fly in the ointment.

Waiting for Godot-san

In my report from Toyota’s quarterly results, there was one thing I forgot to mention decided to keep for later. As long as I have been going to these things, and it has been a while, the first question has always been given to a Nikkei reporter. Old Japanese custom, like AP (and recently Reuters) at the Whitehouse. As long as I have been going to these things, the Nikkei reporter always asked when Toyota wants to make a profit and pay taxes at home. That kabuki dance is disguised as “when can we expect positive results on an unconsolidated basis?” The folks in the room need no translation, they roll their eyes and pens, or check their Brakkubely. That’s a Blackberry for you. This time, it was different.

Some people like to bitch about the crafty Nips who are manipulating their currency again. Other people like to cash-in on sudden swings in currency valuations. If you are of the second kind, then Reuters recommends a look at formerly beaten-down stocks of Japanese carmakers who nearly went under during years of unfettered appreciation of the ¥en.

Here we go. Are you sitting down?

Presenting its Q3 financials in Tokyo today, Toyota delivered much higher profits and much higher sales while promising even higher profits at pretty much flat sales for the future. With a man on his left who looked like an accountant, and who had a big accountant’s briefcase on his knee, ready to pull whatever document his master needs, and a very quiet Shigeru Hayakawa on his right, Toyota Senior Managing Officer Takahiko Ijichi did forecast a net profit of 860 billion yen ($9.3 billion) for the fiscal year ending on March 31, 2013 up from the previously forecasted 780 billion yen. He also signaled a pause in Toyota’s rapid expansion:

As we all know, TTAC has an occasional thing for pink cars. So has Fiat. Right where I live. Fiat delights Japan with the 500 Fiore Rosa (i.e. “Pink Flower”) limited edition of its Cinquecento.

Toyota, along with its Japanese peers, has wallowed in double digit minus territory in China, ever since cars were upturned and dealerships torched in September over a few uninhabited rocks in the East China Sea. In January, China sales of Toyota shot up 23.5 percent compared to the same month a year earlier. Are Japanese fortunes in China finally turning to the better?

A new year started in Japanese auto sales, and the easy double digit up times while comparing with a disaster 2011 are over. It’s getting worse: This year, Japan’s new car sales compare to 2012 sales on government-speed: Japanese could collect hefty subsidies in most of 2012, no such largesse this year. In January, new car sales are not down 12.9 percent, as the Dow Jones News Wire make you believe. They are down 7.8 percent, as correctly reported by Reuters. But down is down. Please come to the tables.

Honda made cautionary noises when announcing its quarterly numbers today, taking its annual profit forecast for the year down a notch to 370 billion yen ($4.1 billion). Three months ago, Honda already had cut its profit forecast for the fiscal year to March to 375 billion yen ($4.7 billion) from its earlier estimate of 470 billion yen ($5.9 billion). $1.8 billion evaporated on the forecast, mostly due to continuing sales troubles in China.

They are a familiar sight – and sound – at Nissan factories and those of other OEMs around the world: Little machines that truck around the factory floor while belting out “Mary had a little lamb,” or other distinguished ditties. Now, they star in their own YouTube video.

Usually, we are not big on COTY’s, but this one is too good to pass up. According to lore, which is sometimes parroted in the comments at TTAC, there is mutual hate between Koreans and Japanese. This did not stop Korean journalists from crowning a Japanese car as Korea’s Car of the year: The Toyota Camry. This was so momentous that Toyota Korea president Hisao Nakabayashi broke into tears when the award was presented at a Seoul hotel.

America, land of wide open roads and big cars, listen up: On the sidelines of Nissan showing its new day care center at its Yokohama headquarters to reporters, Nissan’s COO Toshiyuki Shiga made a comment that should resonate well with American customers:

Yesterday, I took you on a visit to Tokyo, to the Japan Classic Car Association’s New Year Meeting, and on a tour of imported cars in Japan. If you believe the propaganda, there aren’t any imported cars in Japan. But it is not true.

The history of car imports to Japan is a history of Yanase, Japan’s premiere car importer. Yanase was founded in 1915 as an importer of Buicks and Cadillacs to Japan. One of his big customers was the Imperial Navy which “had nothing but Buicks,” as Jiro Yanase told a reporter. The Japanese Navy also put Yanase nearly out of business, in December of 1941.

During the war, Yanase kept the Buick and Cadillac signs up to attract service business. After the war, Yanase became GM’s sole importer to Japan. Soon, he became the world’s go-to man for car imports to Japan.

Guangzhou Autos is reporting that 2012 profits are down as much as 80 percent, thanks to the dispute with Japan over a few islands in some godforsaken corner of the world.

Just married: Toyoda, Reithofer

Ever since Toyota and BMW started their trial marriage a year ago while sharing secrets and the occasional good time, things went very well for the Japanese/Bavarian couple. Japanese and Bavarians (and I can say that from years of experience) love to have fun, but also are stickler for form. In summer, the happy couple was formally engaged via a Memorandum of Understanding. In the rural parts of old style Bavaria and old style Japan, formal marriage often did not commence until there was proof that the arrangement would indeed be fruitful. With successful fertilization having been achieved, today, papers were signed for a formal and official alliance between Toyota and BMW.

Takeshi Uchiyamada, not really meaning it

Toyota “appears set to choose Vice Chairman Takeshi Uchiyamada as its next chairman,” The Nikkei [sub] writes today. Uchiyamada used to be Toyota’s R&D Chief, and is celebrated as the “father of the Prius.” He was made Vice Chairman last year. If confirmed, he would replace the 75 year old Fujio Cho. A Chairman at Toyota has more of an oversight role. The executive power rests at President and CEO Akio Toyoda.

At the sidelines of the Detroit Motor Show, GM conceded what we had said all along: Toyota is the world’s largest Automaker again, with GM in #2, and – surprise – Volkswagen right behind GM.

After Toyota had announced, on a preliminary basis, that they had produced 9.92 million units in 2012, and sold 9.7 million, Volkswagen announced on Monday global deliveries of 9.1 million for the year. We expected GM to announce, as usual, when they surrender the report for their last quarter.

Johan de Nysschen, at home in Hong Kong

New Infiniti-boss and former Audi U.S. chief Johan de Nysschen wants to bring Infiniti home to Japan. He had said this to me last September in his office in Hong Kong, and he reiterated it again in Detroit when talking to the Wall Street Journal’s man in Japan, Chester Dawson. Back home in Yokohama, people are sucking air through their teeth. “Muzukashi desu ne.” This will be difficult.

Toyota sold 236,659 Prii (all kinds) in the U.S. alone in 2012, all of them imported from high-yen Japan. This is a major drag on the car’s profitability. Long import routes are a hindrance, offshore production also tends to impact the granularity of options and trims. U.S. production of the Prius was expected for last year, it did not happen. Yesterday, Shigeki Terashi, head of Toyota Motor North America Inc. came as close to announcing as possible that Toyota plans to produce the Prius in North America. He didn’t really say it, and you needed to be Japanese to hear it.

The Tokyo Auto Salon was mobbed, to a high degree by youth that allegedly has no interest in cars, or procreation. They come to the Auto Salon for two reasons: Cars and girls. Both are plentiful. On Friday, we promised you in-depth coverage of this important topic, and here it is. Like with our hachi-roku coverage, we try to give you a feeling for the overwhelming number of underdressed women by giving you TTAC’s biggest picture collection of all times.

CAUTION: The content may be NSFW in certain places that object to bare skin, racy outfits and musings about deviant behavior. Do not click and/or complain if that offends you.

On Friday, we mentioned that Toyobaru’s hachi-roku absolutely dominates the Tokyo Auto Salon into total submission. Just about any booth (save that of Honda, Nissan etc.) has the almond-eyes of one or more hachi-roku looking at you. On Friday, we promised you visual proof. Here it is, and it is a monster. It is the biggest collection of hachi-roku pictures this side of Gunma.