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Press Conference by EURU Chairman

2012/02/08


Mr. Roland Krüger

1.Reflection on 2011

Last year, Japan was unfortunately very hard-hit by the Great East Japan Earthquake and the tsunami, and on behalf of all members of EURU, I would like to extend condolences to all those who have lost precious lives and were affected by these events. However, what Japan and the Japanese people were able to do, the steady steps forwards to recover, are not only impressing, but it is actually amazing and can be a role model for the rest of the world.As for the vehicle manufacturers in Japan, the recovery was definitely something that would not be expected so far, and as a key industry in Japan, the car industry has taken up actually its role as a leader and this is giving all of us a time to serve our respects to the car industry here in this market. We will continue not to spare any effort to help with recovery.

2.2011 Results

Last year, the sales in Japan were down by 16.7% from a year ago to about 2.69 million units without Kei cars. That decreases are due partly to the effects of the earthquake and the flooding in Thailand. It’s about 50% of the peak in 1990, again, that is without kei cars. If we look at the Kei cars also, that category has declined versus 2010 to 1.52 million units.

For the imported vehicles on the other hand, non-Japanese brands were up 13.1% year-to-year at roughly 206,000, suppressing 200,000 units for the first time in four years. The total figure of imports including Japanese brands was up by 22.5% to about 275,000 units. The share to the entire registered vehicle market was 7.7% of non-Japanese manufacturers and 10.3% of total imports of the car market. Both of these figures represent record highs since 1966 when EURU started compiling statistics.

The non-Japanese brand vehicles eligible for the eco tax incentives, or the eco-tax eligibility as it’s called, accounted for 45% almost, which is twice the figure of the year before. The European manufacturers mainly launched new models that combined engine downsizing, which means smaller engines with small displacement and turbocharges, and newly developed transmission, pursuing environmental performances while not sacrificing the fun of driving. I believe that those vehicles manufactured in such a manner are well received by customers in Japan. Furthermore uniquely designed new imported models were introduced one after the other and they sold well. This is what we believe has contributed to the growth of imported vehicles in Japan.

In addition, the 42nd Tokyo Motor Show held in December 2011, a number of overseas manufacturers exhibited their products, while we participated in the official events also as a cosponsor, such as the opening ceremony. I’m confident that the event was truly an international trade show with participation by many overseas automakers to broadly communicate attractiveness of automobiles to the customers in Japan.

3.2012 Outook

Going forward, with the production of Japanese car manufactures back on track, the share of imported cars will likely be lower than in 2011. However, we believe that in terms of the total number of vehicles sold, the trend from the year 2011 will continue in the year 2012.

By continuing enhancement and efforts to launch new models with better environmental performance based on approaches differ from some of the Japanese automakers and to offer products meeting the needs of those customers who seek uniqueness of imported cars, I’m certain that the ongoing trend will be maintained and in some segments maybe even expanded.

Lately, the new technologies that can create brand-new demand are being introduced such as next-generation vehicles including battery electric vehicles (BEV) and hybrid electric vehicles (HEV). As such, those technologies that were not used in automobiles are now applied and marketed as an attractive product of individual brands here in Japan, and in that way, strong brand images cultivated by the imported cars are in the past will most likely be strengthened by these new technologies further.

4.EURU Activities

1)Technical Issues

(1)Technical issues that EURU is facing its harmonization of emissions and fuel efficiency test procedures. While the fuel efficiency standards contribute to CO2 reduction, at the same time, they have huge impacts on the product planning and technical development of our vehicles. For that reason, it is the greatest point of interest for EURU and EURU members so that we are calling for global harmonization of test procedures. Japan’s Ministry of Land, Infrastructure and Transport (MLIT) is taking initiatives on discussions of WLTP at the UN WP29 and asked to adopt such as procedure in Japan upon its establishment. A three ministry joint study group on the 2020 fuel efficiency standards agreed to discuss it and the new standards will be announced by the end of the fiscal year 2000. This decision is highly appreciated and EURU hopes for early realization.

(2)Also in November last year, again under the initiative of MLIT, WP29 approved a roadmap on IWVTA. Going forward, MLIT and Japan Automobile Standards Internationalization Centre (JASIC) will prepare specific proposals for scheme design and standards. EURU will support these activities of MLIT and JASIC and again we would like to engage proactively in discussions and also contribute to these discussions positively.

(3)For the widespread use of next-generation vehicles, led by the New Generation Vehicles Committee at EURU (NGVC) launched last year, we will examine and discuss issues and measures to promote the introduction of NGV.
NGV is equipped with secondary batteries and chargers that are not used in conventional internal combustion engines. As there is no globally unified standards and specification on performance of batteries and charging systems, or on safety during transport and disposal of such technologies, EURU will be requesting for the development, and adoption in Japan, of such globally harmonized standards and specifications.

2)Taxation Revision Request

For reduction of taxes levied on automobiles which are exceedingly higher than on international level, towards the full-scale review of taxes on vehicles of the fiscal year 2012, we asked for abolition of the Automobile Acquisition Tax and Tonnage Tax jointly with other related organizations. However, unfortunately, they are not actualized yet, but we would like to continue to have proactive discussions with the government and their respective responsible people at ministries.

In specific, the NGVC will responsibly finalize a written request for taxation revision based on a discussion at an internal Taxation Task Force, which will be submitted to the Ministry of Economy, Trade and Industry and other ministries. We will also continue to participate in hearings by the government, stating our reviews, the views of the importers and car sector.

To continue our initiatives in terms of taxation, we will also look into the eco-tax incentives and revival of the eco-car subsidies that were announced welcome highly, because it does stimulate the market. However, these measures are highly complicated. In order to be eligible for the government incentives, it is necessary to address Japan’s specific schemes including fuel efficiency and emission test procedures, and type approvals, which are unique to Japan. Therefore, in addition to the request of the simplification of the tax system, EURU will keep on is its actions to quickly achieve a globally harmonized vehicle certification system that will reduce the huge burden of developing Japanese-unique or Japanese-only specifications for overseas manufacturers and for importers.

3)Motorcycle Services

Motorcycles services were started in July 2010 and have entered the third year this year. We have a motorcycle committee that we created at the time of the launch of the service. We have been acting with the objectives of obtaining more effective actions and visible results by making an industry-wide effort on issues which used to be taken care of by the individual importer companies.

Last year, in response to the strengthening of the emissions and noise regulations by the Central Environment Council, we submitted recommendations for ideal regulations based on globally harmonized standards. The standards, in our viewpoint, need to be globally harmonized.

In 2012, we will focus on discussions, working for effective and flexible handling of certification procedures with support of MLIT. Meanwhile, in order to apply brakes to the declining trend of motorcycle market as a whole, we would like to focus on market stimulation in a concentrated effort with the Motorcycle Committee of Japan Automobile Manufacturers Association.

5.In Closing

Cooperation with JAMA and other auto-related organizations, as well as with the ministries, METI, MLIT and MOE, we further seek the understanding and support for the growth of the car market and we look forward to further opportunities to all importers to expand the business here in Japan. It is our wish to continue to invest into this market as we are an integral part of this market and the industry as importers.


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