EURU Chairman Press Meeting (January 21, 2016)
EURU held a Chairman’s Press Meeting on January 21, 2016 Following is the speech by Chairman Kronschnabl.
Mr. Peter Kronschnabl
1. Goals as EURU Chairman
EURU was established in 1965, and today, we have 28 four-wheeled vehicle members and 8 motorcycle members who have contributed to the significant growth of the imported motor vehicle market of Japan over the past five decades by offering an ever widening range of imported brands to Japanese customers.
As Chairman of EURU, I will make every effort to contribute to the sustainable development of the domestic motor vehicle market, especially the imported motor vehicle market, by tackling the many challenges facing the automobile industry.
To that end, EURU will work closely with other automobile-related organizations in Japan and overseas, such as JAMA, ACEA, and AAPC. It is also important for EURU to have a constructive dialogue on regulatory and policy issues with the relevant ministries and public authorities.
2. Results of 2015
Last year, the adoption of the latest safety features by “entry models”, the introduction of new models equipped with the most advanced safety technologies and of diverse drive trains as well as the upgrading of existing model lineups gained significant support from Japanese customers. Further, towards the end of last year, new registrations of imported and domestic vehicles slowed, mainly due to growing economic uncertainties both at home and abroad.
For 2015, sales of imported four-wheeled vehicles were down by 2.2 percent from a year earlier to 328,622 units.
Sales of foreign-brand passenger cars decreased slightly by 1.5 percent to 284,471 units. But imported next-generation vehicles performed strongly. Notably, sales of foreign-brand clean diesel passenger cars continued to rise throughout the year to a total of 28,834 units, an increase of 62.1 percent from a year earlier. Sales of foreign-brand Plug-in Hybrid passenger cars were up by 114.9 percent to 1,775 units.
Foreign brands accounted for 10.5 percent of sales of registered passenger cars and 6.7 percent of the total passenger car market, including Kei cars.
3. Future Market Outlook for 2016 onwards
Japanese consumers will become increasingly interested in advanced safety features and environmental performance. Comfort features for elderly customers will become more important in the medium-term, as Japan adapts to an ageing society.
These trends will create new opportunities for imported vehicles equipped with advanced technology for safety, energy efficiency, environmental compatibility and usability. Imports can provide safe, sustainable and highly convenient mobility at affordable prices for the customers at all times, and EURU members are well placed to provide Japanese customers with a wide variety of attractive imported four-wheeled vehicles and motorcycles equipped with excellent features that reflect the diversity of the motor vehicle culture of the various countries in the world.
Growth of the automobile industry requires the development of a motor vehicle culture where the cars of today are seen as part of a long motoring tradition. In many European countries, various incentive schemes are available to encourage, not just the ownership of historic cars, but also their use on the public highways. To help foster such a motor vehicle culture in Japan, EURU suggests that central and local governments should offer similar incentive schemes for historic vehicles.
2016 is expected to be a challenging year for the Japanese domestic motor vehicle market. The changes to auto-related taxes contained in the Ruling Party’s Taxation Revision Outline for Fiscal Year 2016 adopted last December risk having a negative impact on the market by adding to the tax burden on the motoring public.
On the other hand, imports received very positive feedback from visitors to the Tokyo Motor Show and local motor shows held in Nagoya, Osaka and Fukuoka, as well as the imported car shows held at more than 15 locations nationwide.
EURU members are planning to respond to this interest by launching new models, introducing advanced safety technologies and powertrains, as well as upgrading their sales networks.
Despite the expectation that difficult market conditions will continue, EURU members will be looking for sales of 300,000 units of foreign brand vehicles in 2016.
4. EURU Activities
1) Automobile Taxation
EURU, like other automobile associations in Japan, has been advocating for a long time a reduction in the burden of automobile taxation on users and a streamlining of auto-related taxes. One of my first tasks on assuming the chairmanship of EURU was to attend a parliamentary hearing on the revision of automobile taxation to make requests of EURU.
EURU welcomes the direction in the outline by the Ruling Parties to extend the “Greening Exceptional Tax Incentives”, but, we are concerned that the adoption of more stringent fuel efficiency criteria to qualify for incentives will lower the number of vehicles which will qualify for a reduction in tax. This will mean an overall increase in the tax burden borne by the motoring public and risks depressing a market that has still not fully digested the increase in Consumption Tax from 5 to 8 percent.
There are further clouds on the horizon. The automobile industry had hoped that the further increase in Consumption Tax from FY 2017 would be offset by the abolition of Acquisition Tax. Unfortunately however, it has now been decided that Acquisition Tax will be replaced by a new Environmental Performance Levy. To pre-empt a significant disruption of the domestic car market from an increase in the overall tax burden, EURU, together with other automobile organizations, strongly urges the government to make a compensating reduction in Automobile Tax from FY 2017.
EURU hopes that the government will take the opportunity of the tax reforms from FY 2017 to reduce the discrepancy in the tax borne by registered cars and Kei cars which will be widened by the introduction of the Environmental Performance Levy payable at a maximum rate of 3% by registered cars but at 2% by Kei cars by cutting the Automobile Tax and the like.
2) Technical and Environmental Fields
In order to facilitate the introduction into the Japanese market of imported vehicles equipped with leading-edge safety and environmental technologies, EURU has promoted for many years the international harmonization of technical and environmental regulations. Let me mention several areas in which progress is being made
(1) Motor Vehicle Noise Regulations
For the international harmonization of noise regulations, which EURU has long requested, last October, the governments of Japan and the EU agreed in UN WP 29 “new test procedures that reflect actual conditions more accurately”. EURU welcomes the decision of the Ministry of the Environment to adopt these new noise regulations later this year.
When these revisions are implemented, importers will no longer need to conduct additional testing that is unique to Japan.
(2) International Whole Vehicle Type Approval (IWVTA)
With the support of Japan’s Ministry of Land, Infrastructure, Transport and Tourism, UN WP29 has been working on the establishment of an ‘International Whole Vehicle Type Approval’ system, commonly known as IWVTA. EURU members have high hopes that when this system is complete, certification procedures in Japan will be considerably streamlined for those vehicles approved under IWVTA.
With the amendment of the Road Vehicles Act in June last year, Japan will adopt in April this year a new certification system that marks a first step towards the implementation of IWVTA.
(3) Autonomous Driving
The adoption of “autonomous driving” technologies holds out the promise of improving both motor vehicle safety and environmental performance.
Presently Japan, as well as the EU and the United States, are striving to promote new advanced technologies as the first steps towards the ultimate goal of “fully-automated driving”. It is important however that revisions to existing standards and regulations in order to facilitate the introduction of autonomous driving technologies should not create barriers to trade. EURU will encourage the Japanese authorities to take full account of the desirability of international harmonization when revising Japan’s legal framework for the use of such technologies.
(4) Adoption of WLTP for Emission and Fuel Efficiency Tests, and Future Exhaust Emissions Regulations
EURU welcomes Japan’s intention to adopt the ‘Worldwide harmonized Light vehicles Test Procedures’, or WLTP, which has been developed by UN WP 29 as the basis of future exhaust emission regulations and for the measurement of fuel efficiency.
It is however critical to achieve international harmonization in terms of both the content of the regulations and the timing of their adoption. EURU will continue to work closely with the ministries concerned to ensure that the introduction of WLTP does not create requirements that are unique to Japan.
Similarly, EURU will promote international harmonization for the future regulations for direct-injection gasoline engine vehicle particulates and evaporative fuel emissions which are now under discussion
3) Motorcycle Activities
On motorcycle activities for international harmonization of regulations and standards, we have made significant progress in this area.
First, for the long-sought issue of noise regulations, the relevant announcement has been revised to adopt reference values for the proximity exhaust noise, achieving full regulatory harmonization.
Second, except DRL, the lamp regulations were harmonized with the UN Regulations in June 2015.
Also activities for market stimulation are making progress.
It was an epoch-making development that the Joint Motorcycle Test Ride for the media was held for the first time in the history of EURU Motorcycle in April, last year. With participation by 195 persons from 58 companies including motorcycle magazines and general newspapers, appeals of imported two-wheelers were promoted widely via publications, TV coverage and the like. This year also, we are planning to hold the Second Joint Motorcycle Test Ride in a format that will allow attendance by broader media.
This year, we are planning to issue the “50 Years of EURU”, a review of the role played by imported vehicles over the past five decades.
Looking forward to the next 50 years of Japan’s motor vehicle market, EURU is determined to spare no effort to contribute further to the sustainable development of Japan’s motor vehicle market, collaborating with other motor automobile-related organizations such as JAMA, ACEA, AAPC as well as the government bodies concerned.