JAPANESE AUTOMOBILE AND MOTORCYCLE COMPANIES: SUBARU, ISUZU, TRUCKS, CAR PARTS AND TIRES

JAPANESE AUTOMOBILE COMPANIES

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Smart Car for sale
in a vending machine
Japan has 11 companies that produce motor vehicles, including eight that make cars or minicars and three that make only trucks. And additional 9,000 companies supply parts and do subcontract work. The automobile industry accounts for around 10 percent of Japan's industrial output and employs 3 percent of the workforce.

The top five automobile companies in Japan are Toyota, Honda, Nissan, Mitsubishi and Mazda. The other companies that make motor vehicles are Subaru, Suzuki, Daihatsu, which make cars, and Isuzu, Hino, Fuso, which make trucks. These companies fight for a piece of market that is 30 percent the size of the United States market. Foreign companies claim only a 4.6 percent share of the car market in Japan.

Competition is very fierce in the Japanese car market. A greater number of models with more features are wheeled out at a faster pace than in the United States. The cars often have funky names like Vitz, Cube and Funcargo and have cutsie ads with young blondes, happy families and Hollywood celebrities to back them up. In the $7000 to $10,000 price range, where many foreign companies maybe have at most a single car, Toyota offers six models, Honda has five and Nissan and other companies maybe a dozen more.

Honda, Subaru and Toyota were ranked the best all-around automakers by Consumer Reports for the third year in a row in 2011. Volvo was forth, followed by Ford and Hyundai. Chrysler, GM, BMW and Mercedes Benz were near the bottom. In 2010, Honda and Subaru tied for first with an overall score of 77 out of 100. They were followed by Toyota and Hyundai with Nissan and Volkswagen tied for forth.

To compete in the Japanese market, automakers make specialized cars for niche markets with a minimal amount of time needed to develop the car, retool and produce them on assembly lines. Companies don’t need long lead times and can respond quickly to trends and changes. This helps whip the companies into shape and gets them in good condition to tackle overseas markets.

One advantage that Japanese companies have over their American counterparts is their health care costs average between $250 and $350 per worker compared to $1,200 to $1,600 per worker for American companies.

In 2005, Japanese automakers earned an average of $2,400 more per car than U.S. rivals, in large part by spending less on labor and health care.

All of eight of Japan’s automakers were back in he black for fiscal 2009 despite posting drops in sales, By the second quarter of 2010 all eight of Japan’s major automakers were reporting increases in sales. Sales were up in July and August both at home and abroad.

Websites and Resources

Good Websites and Sources: Mitsubishi Motors mitsubishicars.com ; Mitsubishi Electric Cars mitsubishi-cars ; Mazda Global Site mazda.com ; Subaru subaru.com ; Suzuki Auto suzukiauto.com ;Daihatsu daihatsu.com ;

Links in this Website: INDUSTRIES IN JAPAN Factsanddetails.com/Japan ; JAPANESE COMPANIES Factsanddetails.com/Japan ; TRADE AND OVERSEAS BUSINESS IN JAPAN Factsanddetails.com/Japan ; MACROECONOMICS IN JAPAN Factsanddetails.com/Japan ; JAPAN INC. AND REFORMS Factsanddetails.com/Japan ; JAPANESE AUTOMOBILE INDUSTRY Factsanddetails.com/Japan ; AUTOMOBILES AND DRIVING IN JAPAN Factsanddetails.com/Japan ; HYBRIDS, FUEL CELLS AND ELECTRIC CARS IN JAPAN Factsanddetails.com/Japan ; JAPANESE AUTOMOBILE COMPANIES Factsanddetails.com/Japan ; TOYOTA Factsanddetails.com/Japan ; TOYOTA PRODUCTION AND WORKERS Factsanddetails.com/Japan ; TOYOTA PROBLEMS Factsanddetails.com/Japan ; TOYOTA CARS, RACING AND ROBOTS Factsanddetails.com/Japan ; HONDA Factsanddetails.com/Japan ; HONDA CARS, PLANES, ROBOTS AND RACING Factsanddetails.com/Japan ; NISSAN Factsanddetails.com/Japan ;

Good Websites and Sources on Industry: Good Photos at Japan-Photo Archive japan-photo.de ; Companies Listed by Industry mizuho-sc.com ; Ministry of Economy, Trade and Industry meti.go.jp/english ; Statistical Handbook of Japan Manufacturing Chapter stat.go.jp/english/data/handbook ; 2010 Edition stat.go.jp/english/data/nenkan ; News stat.go.jp

Subaru

Subaru is the Japanese name for the Pleiades. The star cluster is pictured in the company's logo. The company has reputation for great engineering but lousy design. In 2009, it began running a series of ads with Robert DeNiro, promoting a Lexus-style luxury sedan.

Subaru does well in Consumer Reports rankings. In 2010 the magazine praised Subaru for its 2010 Legacy sedan and Outback wagon. Honda, Subaru and Toyota were ranked the best all-around automakers by Consumer Reports for the third year in a row in 2011. In 2010, Honda and Subaru tied for first with an overall score of 77 out of 100. They were followed by Toyota and Hyundai with Nissan and Volkswagen tied for forth.

“In 2012, Japanese automakers dominated Consumer Reports' annual survey of the best cars, with Toyota Motor Corp. taking five of the "Top Picks" and Subaru Motor Co. taking the top score as best-overall automaker. Subaru ousted Honda Motor Co. as the top overall.

The Detroit News reported: “Japanese automakers dominated Consumer Reports' 2012 survey of the best cars, with Toyota taking five of the "Top Picks" and Subaru Motor Co. taking the top score as best-overall automaker. Subaru ousted Honda Motor Co. as the top overall. Top picks by vehicle category were: Best sporty car: Ford Mustang. Small SUV: Toyota RAV4. Family sedan: Toyota Camry hybrid. SUV: Toyota Highlander. Affordable family sedan: Hyundai Sonata. Minivan: Toyota Sienna. Sports sedan: Infiniti G. Green car: Toyota Prius. Small car: Subaru Impreza. Pickup truck: Chevrolet Avalanche. [Ibid] [Source: Detroit News, February 29, 2012]

Subaru did well in the United States in 2009 despite the recession with well-timed releases of its Legacy, Outback and Forester models, scoring the biggest gain in the industry, 14 percent. Fuji Heavy Industries Ltd., known for its Subaru brand, saw its sales in the United States in 2011 edge up 1.2 percent to 266,989 units. [Source: Kyodo, January 5, 2012]

Isuzu

Isuzu is known in Japan primarily as a truck maker. It was the No. 1 truck maker in Japan in 2003, producing 86,354 trucks. It was the first time it held the position since 1997.

Isuzu is Japan’s largest maker of light trucks. It sold 650,734 vehicles on 2006, with about 85 percent of sales overseas. It produces about a third of its vehicles in Japan and two thirds overseas plants. Its Elf truck is its most popular model. It's one-ton diesel pick ups are widely seen throughout Southeast Asia, particularly in Thailand.

Isuzu has a partnership with General Motors. GM bought 34.2 percent of in 1971 and raised its stake to 48.2 percent but saw it holdings diluted to 7.9 percent as part of bailout of the Japanese company.

In 2001, Isuzu closed down SUV production in Japan and eliminated nearly 10,000 jobs, a quarter of the workforce.

In the United States, Isuzu is known best for its Joe Isuzu commercials. In 1994, it dropped out if the car market to concentrate on trucks. In 2001, it launched a stylish SUV called the Axiom that was featured in the film Spy Kids.

Isuzu hoped to sell 664,000 vehicles n 2007 through expanding its overseas sales network, particularly in places like Russia and South Africa. It hoped to increase overseas sales by 8 percent to 590,000 vehiclesand expects a domestic sales drop 28 percent to 74,000 vehicles.

Isuzu sold 411,000 units in 2010.

Isuzu made a group net profit of ¥ 51.6 billion (about $500 million) in fiscal 2010-2011, a 514 percent increase from the previous year, on sales of ¥1.42 trillion. (about $16 billion). The increase was largely due to the sale of trucks, especially in emerging markets such as China.

Isuzu has plants in Indonesia and Mexico. It is focusing on markets in Indonesia, Thailand and North America.

Daihatsu

Daihatsu is known for making small cars and trucks. Its has traditionally produced many small vans in Third World countries. It is now a subsidiary of Toyota.

Suzuki and Daihatsu sell about the same number of minicars in Japan each years: around 600,000. Daihatsu’s Move and Tanto were second and third best selling vehicles in 2008. It’s Move and Mira were second and fifth best selling minicars in 2004.

In fiscal year 2006-2007 Daihatsu topped Suzuki for the first time in overall sales in the minicar category in Japan. Daihatsu sales rose 4.1 percent from the previous year to 616, 206 vehicles while Suzuki’s sales dropped 3.2 percent to 605,486.

Complaints by American Automobile Companies in Japan

United States automobile manufacturers over the years have complained that unfair trade practices kept their vehicles shut out of the Japanese market. The Japanese response to this has been that American cars were inferior and they had the steering column on left side (Japanese cars have their steering wheels on the right side because they drive on the left side of the road).

In 1995, the big three American auto companies finally got around to introducing vehicles that were designed for Japanese drivers. Among the right-hand-drive vehicles that were introduced then were the Ford Taurus sedan, Neon subcompact, Voyager minivan and Jeep Cherokee. General Motors later introduced a right-handed-drive Caviler and Saturn and opened an ultra-expensive showroom with right-handed models in the middle of Tokyo's Shinjuku Station, which accommodates 2 million passengers everyday.

The most buzz went to the expensive and stylish Neon, a compact car made by Chrysler. The car was seen a direct challenge to Japanese competitiveness and was labeled the "Japanese-car killer." "The American Neon in is coming right us," one magazine said, "at the same time the neon lights are flickering out on the Ginza." In the end the Neon didn’t sell very well and disappeared

Trucks and Construction Machinery in Japan

The largest Japanese truck makers are Hino, Nissan Diesel, Fuso and Isuzu. Hino Motors Isuzu is 50 percent owned by Toyota. Fuso is owned by Mitsubishi

Komatsu and Hitachi are major producers of heavy construction machines. Komatsu is No. 2 in the world after Caterpillar. It learned to build sophisticated machines as a Caterpillar licensee after World War II.

Japanese trucks sell well in China, Southeast Asia.

Changes in environmental standards have helped improve truck sales in Japan (See Environment). Hino and Nissan Diesel makes hybrid diesel trucks. Komatsu plans to make diesel-electric hybrid excavators in China.

Hino posted a loss of ¥ 10.04 billion (about $120 million) in fiscal 2010-2011 on sales of ¥1.24 trillion. (about $15 billion). The loss was due mainly due to damage and a loss of sales due to the March 11 earthquake and tsunami.

Fuso is owned by Daimler Benz.

UD Trucks (formally Nissan Diesel Motor Co,) is owned by Volvo, which in turn is owned by a Chinese automobile maker.

Motorcycle Industry in Japan

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new Honda motorcycle
The big four domestic motorcycle makers in Japan are Honda, Yamaha, Suzuki and Kawasaki. The motorcycle industry grew very fast in Japan after World War II partly because motorcycles and scooters were the only affordable means of transportation for most people. At one time there were than 2000 Japanese motorbike and scooter manufacturers.

As the industry matured and solidified four Japanese companies---Honda, Yamaha, Suzuki and Kawasaki---emerged and grew into the giants that now dominate the global market, while companies like Hosk, Meguro, Lilac and Tohatsu died and have been forgotten.

Motorcycle sales have declined at home as young Japanese have turned to computer games instead of the thrill of the open road for fun and the number of young people has shrunk because of population declines. For new markets motorcycle companies are looking increasingly to elderly baby boomers.

By 2010 domestic motorcycle sales had declined by about 10 percent from the peak mainly due to lack of interest in motorbikes by young people, a trend that some trace back to the 1980s when high school students were prohibited from riding motorbikes to school. The industry also complains of a lack of parking for motorcycles and increased parking wardens giving tickets to illegally parked motorbikes. The industry put its hope in electric and eco-friendly models to rejuvenate sales.

Global sales have been rising due primarily to growing demands in Asian and other emerging economies. Japanese motorcycle companies are increasingly looking abroad not only for sales but also to make motorcycles. High oil prices and rising affluence in the Third World, where an increasing number of people can afford motorcycles but not cars has increased demand for motorcycles and motorscooters.

There are about 50,000 Harley Davidsons on the road in Japan. About a 10,000 new ones are sold each year. A new Harley FLHRCI Road King Classic retails for $22,000.

See Honda, Yamaha, Suzuki and Kawasaki, Economics, Industry, Automobile Industry

Motorcycles, See Education, Health, Transportation

Yamaha Motorcycles

Yamaha motorcycles is based in Iwata, Japan and has 37,000 employees. Founded in 1955, it is separate company from the Yamaha that is the world’s largest maker of musical instruments. Yamaha began as a piano maker, made aircraft propellers in World War II and moved into motorcycle and boat motors in the 1950s.

Yamaha is the No.2 motorcycle producers in Japan after Honda.. It sells about 6 million motorcycles a year globally. Sales in the January to June period in 2010 were 3.48 million units, up 30.2 percent from the same period in 2009. It also makes outboard engines for boats and jetskis and produces algae that can used as a feedstock for oysters and shrimp.

Yamaha sold 3.62 milion units in 2005, up 15 percent from 2004. The decline of sales in Japan has more than been offset by increase of sales in North America, Europe and Southeast Asia.

Yamaha does a lot of business in Southeast Asia. It plans to sell 3 million motorcycles there in 2007. In 2005, it sold 230,000 in Vietnam up from 29 percent from the year before; sold 340,000 in Thailand up 27 percent from the year before; and sold 1.1 million in Indonesia up 21 percent from the year before.

Yamaha is the world’s second largest motorcycle maker.

Car Parts and Navigation Systems in Japan

Densu is the world’s largest listed auto parts makers. Affiliated with Toyota, it had a profit of $3.48 billion in fiscal 2007-2008 but lost $373 million in fiscal 2008-2009.

About 20 percent of the parts from a Chevrolet are made in Japan. The five-speed transmission in a new Chevy Equinox and Pontiac Torrent is made in Japan by Aisin Seiki.

Navigation systems, using GPS satellite technology, are fairly common in Japanese automobiles. They show the car's location on a detailed map, provide information on reaching a destination, give detailed information on traffic, and suggest alternative routes. When the navigation system is not being used the screen becomes a television. Some systems show empty parking spaces and provide information on what movies are playing.

A total of 4.07 million car navigation systems were sold in 2006, up from 1.5 million units in 2000 and 800,000 in 1997. Many new cars have them as standard equipment.

Bridgestone and the Japanese Tire Industry

“Bridgestone is Japan’s largest tire maker. Among major tiremakers are Sumitomo Rubber Industries, Toyo Tire & Rubber and Yokohama Rubber Co. Bridgestone Sports Co. is Japan’s largest golf goods manufacturer and a maker of bicycles.

As demand for new automobiles shrinks in Japan, Japanese tire producers are quickly shifting production to emerging countries where labor is cheaper and demand for vehicles is soaring. Bridgestone, Japan’s largest tire maker, plans to spend $300 million between 2012 and 2015 to expand in developing countries, with a strong focus on China and India. The grandfather of Yukio Hatoyama, Japan's former prime minister, on his mother side was the founder of Bridgestone. Consequently his mother is very rich.

Tokyo-based Bridgestone is the world's largest tire makers in terms of sales, with a 18.2 percent global share of the tire industry in 2005, ahead of Michelin with a 17.7 percent share. and Goodyear.
Bridgestone earnings are often tied to global car sales. When care sales are high so too are Bridgestone’s earnings and profits. When car sales are down it suffers. Bridgestone did ¥2.5 trillion worth of business in 2002. It supplies many of the tires used in Formula 1.

In 1988 it bought Firestone for $2.6 billion and Bridgestone-Firestone was founded in the United States. Bridgestone suffered in 2000 when Firestone was forced to recall 6.5 million tires after a series of accidents involving Ford Explorers outfit with Firestone tires lead to at least 46 deaths. The recalls cost the company more than $500 million, broke a 50-year relation between Ford and Firestone and damaged Bridgestone-Firestone's reputation.

Bridgestone regained U.S. and European sales after the recall surprisingly quick. By 2002 it was making big profits. It was hurt in September 2003 by a huge fire at one of its plants that burned for 46 hours before firefighters brought it under control, destroying 40,000 square meters of one factory, incinerated 165,000 tires and caused the evacuation of 5,000 people.

Bridgestone made good profits in the mid 2000s but has seen its profits shrink as a result of increased material costs for rubber and petroleum-based materials and declining sales as a result of less driving and high gasoline prices and the drop in automobile sales during the global financial crisis in 2008 and 2009.

Michelin is Bridgestone’s main rival. In November 2007, Bridgestone said that it planned to spend ¥1.25 trillion over five years in its battle with Michelin for No. 1 spot by launching factories sin Mexico, Poland, Hungary, and Japan and expanding existing plants in India and Indonesia.

In December 2009, Michelin announced that it was thinking of ending tire production at its sole tire factory in Japan. The plant, in Ota in Gunma Prefecture, employs 300 people.

New Tire Models to Go Without Air or Oil

The Yomiuri Shimbun: “Major Japanese tire manufacturers have released prototypes of next-generation products with more environmentally friendly features. Bridgestone Corp.'s new "air-free" tire uses a special kind of meshlike resin on the sides of the tire to support a vehicle's weight. According to the company, all materials used in the tire are recyclable. "The tires can absorb enough shocks to allow you to enjoy a comfortable ride," an official said. [Source: Yomiuri Shimbun, December 6, 2011]

“Sumitomo Rubber Industries, Ltd. has released a prototype of a new tire that does not use petroleum or any other kinds of fossil fuels by replacing them with plant-derived additives. The company will study the durability of the tire and develop techniques for mass production before its planned sale starting in 2013, says Sumitomo. [Ibid]

“Meanwhile, fuel-saving tires currently available on the market have also been improved. Toyo Tire & Rubber, Ltd. announced that it would start selling a new tire in February that can meet the highest grade for fuel savings while simultaneously improving brake performance on wet road surfaces. The Yokohama Rubber Co. has also been selling a snow tire featuring superior brake performance on frozen road surfaces. [Ibid]

Image Sources: 1) 6) 7) Mazda 2) 3) 4) 5) Mitsubishi 8) Suzuki 9) xorsyst blog 10 Wikipedia

Text Sources: New York Times, Washington Post, Los Angeles Times, Daily Yomiuri, Times of London, Japan National Tourist Organization (JNTO), National Geographic, The New Yorker, Time, Newsweek, Reuters, AP, Lonely Planet Guides, Compton’s Encyclopedia and various books and other publications.

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© 2009 Jeffrey Hays

Last updated October 2012

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