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Sunday, March 16, 2008
Car industry hitting the bumps as wheels lose their cachet of cool
Anew TV commercial for insurance company Tokyo Kaijo Nichido features two newborns lying next to each other in a hospital maternity ward, telepathically discussing the "pleasures" that await them in life.
One has hopes and dreams: He's going to build a house and travel the world. The other is already intimidated. "I'm afraid to even breathe," he says. An omniscient voice breaks in with the comment that "you only live once" and a good insurance plan can relieve anxieties about the future.
The premise is hardly original, but the presentation and its implications are interesting.
Here we have a new human being, right out of the chute, worrying about the terrible things that can happen in life before he even has a taste of it. Is this a comment on today's supposedly fretful youth, who prefer serial part-time employment to careers, the impersonality of virtual relationships to face-to-face encounters and living indefinitely with parents rather than venturing out into the world?
When the one baby says, "I'm going to buy a cool car after I turn 18," and the querulous one replies, "I don't want to be in an accident," is it a reflection of a cultural sea change?
According to a survey conducted by the Japan Automobile Manufacturers Association, only 20 percent of 18- to 29-year-olds who say they aren't interested in owning a car mentioned the possibility of accidents as a reason. Most cited economic factors, but some implied a total lack of regard for automobiles. Thirty percent said public transportation is more convenient, while 40 percent confessed to not even possessing a drivers' license.
Whether it's due to fear, apathy, or common sense, this disinterest in car ownership among young people presents a serious challenge to Japan's automobile industry. With the exception of kei cars (models with engines of 660 cc or less), automobile sales have declined for three years in a row. Car ownership in Japan peaked in 2001, and sales in 2007 were about the same level as they were in the mid-1970s.
Japan's aging population has something to do with the trends indicated by these statistics, but the fact is that younger people are not inheriting previous generations' belief in cars as signs of status and affluence — a belief that car manufacturers have taken for granted ever since Japan became an economic superpower.
Japan has never had the kind of car culture that defines American life, but according to a Feb. 16 feature in the Asahi Shimbun newspaper, automobile ownership was considered a pertinent rite of passage for Japanese boomers and Gen-Xers. As one 57-year-old former car-company exec put it, when boys his age graduated from high school the first thing they did was get a drivers license. Moreover, car ownership was considered a prerequisite to dating. "As long as you had a car," he remembers, "girls would just follow you around."
The article mentions a survey conducted by Gulliver, the used-car trading agency, which found that among 18- to 29-year-olds "dating" was mentioned by only 6 percent as a benefit of car ownership — as opposed to 15 percent for all age groups. In recent years, carmakers have revived certain classic sports models that originally appealed to reckless youth — like Nissan's GTR and Mazda's RX-7 — but sales have almost completely been to middle-age men who want to relive that feeling. Today's young men couldn't care less. To them, a car is simply a means of transportation.
Consequently, ads for sportier models feature older actors or distinguished-looking non-Japanese men, while smaller cars and family vehicles get pitched at younger consumers. SMAP heartthrob Takuya Kimura sells his private life as a husband, father and breadwinner with ads for Toyota's Fielder stationwagon. In one commercial, he plays what looks like a typical salesman. Nowhere do you see the sexy, brash, jet-setting professional he portrays in TV dramas.
But image isn't the only issue. Recently, Toyota launched a program aimed at young people with an ad campaign featuring 26-year-old Sho Sakurai, who sings with the boy band Arashi. The Sannenbun (three-year-portion) Plan is a financing option that encourages young consumers to become lifelong Toyota customers. In the past, new additions to the workforce would buy an "entry-level" car, like a Corolla, and every three years thereafter step up to a higher-priced model. With the Sannenbun Plan, buyers can trade in their cars for a new one after three years of loan installments without having to pay off the balance.
Such a strategy may have a limited appeal. Young people continue to gravitate toward urban areas where cars are not only unnecessary, but often an expensive liability. Even in suburbs, people are finding reasons to give up their wheels. In a sidebar to the Asahi article, a 36-year-old salaryman who lives outside of Sapporo said he recently sold his car and doesn't plan to buy a new one, having discovered that public transportation is pretty good. Such an admission may be more chilling to the auto industry than younger people's car apathy, since it implies how easy it is for even men in their 30s to give up what many consider a fixture of modern existence.
Cars are still necessary to people in rural areas — a fact that the ruling coalition exploits in its promotion of automotive-related taxes that pay for more road construction. However, the coalition reinforces its position with projections that claim the number of potential drivers will increase, even though the trends cited above seem to contradict such claims.
One thing is for sure: Driving no long exerts the romantic appeal it once did. Gone are the days when automobiles represented "freedom" and "individuality." If anything, young people see them as a burden and an unnecessary luxury — and who can argue with them?
See Page 16 for Japanese cars not found in Japan.